Friday Free-For-All!

you know what time it is, long it up!

More OV condos available, problems with windows, floors and heat fixed soon!
Church torn down to make more condos
Plenty of choice for island buyers
What can you afford?
Vancouvers baby steps define our time
Carney warns on global risk

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

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rp1
Guest
rp1
CanuckDownUnder
Member
CanuckDownUnder

Mark Carney spoke candidly at a function in Toronto and his "off the record" remarks got leaked. I guess he doesn't consider the general public important enough to hear what he really thinks.

http://www.theglobeandmail.com/report-on-business

So the GFC isn't over yet? Hoocoodanode?

Boombust
Guest
Boombust

Shysters. All of them.

jesse
Member

Carney always speaks candidly. You just have to listen a bit more closely than you do to people who have little to lose by being wrong.

Still, everyone's sh!ts smell a little.

Dave
Member

Here is the latest affordability report.

http://www.rbc.com/economics/market/pdf/house.pdf

It's not as bad as I initially thought. Condos are still pretty affordable, which is a positive sign for price stability. Detached homes are getting excessive though.

southseacompany
Member
southseacompany

Financial Post:Vancouver housing testing 'rationality'

http://www.financialpost.com/personal-finance/mor

TPFKAA
Guest
TPFKAA
RE: the BBC article This article captured everything that is good about Vancouver and in the same moment captured everything this city is throwing away. Forward-thinking my ass. Yes, we have racial harmony. Yes, we have avoided concrete freeways through the central core. But wait: are we building on this legacy? I don't think "thinking forward" is done by by widening our existing concrete monster, highway 1, and adding another concrete monster bridge, instead of creating a transit system that is immune to traffic jams and to the inevitable end of oil. Secondly, what about racial harmony? Through idiotic policies the government has allowed a runaway bubble in the housing market which is already causing racial tensions and scapegoating that will invevitably get worse as the economy hollows out even further. And regarding housing policies and accommodating a growing population:… Read more »
Dave
Member
@TPFKAA: Some good observations for sure. Row houses would be great and there is pretty much none of that product around. The problem is that you can't make money building that kind of product. Land prices are simply way too high. The alternative approach that Vancouver is trying to pursue is lane housing. I am starting to think that's a bad idea though as it gets messy. Apartments are built to market demand. Four bedroom apartments would command a very high price. That pushes most people into attached or detached housing, hence that product doesn't get built. The trend right now with apartments is still towards smaller units. There is still a lot of demand for affordable housing and low price product sells strong. That just the structure of this market. There just isn't much of a market for the… Read more »
patriotz
Member
Active Member
@Dave: The problem is that you can’t make money building that kind of product (row housing). Land prices are simply way too high. The alternative approach that Vancouver is trying to pursue is lane housing. That doesn't make sense. Row housing would give you the same amount of dwelling space per 33×120 as laneway, or "SFH" with suites. The difference is that each dwelling would have freehold title which would allow each household to own. There are basically two things causing the problems with family housing in metro Vancouver, both of them being market distortions created by government: 1. Refusal of municipalities to allow freehold row housing which has resulted in the market resorting to "solutions" like "SFH" with suites and laneway. 2. Inflated land prices which are the result of inflated end product prices which are of course the… Read more »
Phil
Guest
Phil

I just heard the following on CKNW: RBC Senior Econominist discussing how Vancouver housing costs 72% of income. Then Michael Levy comes on and says it is irrelevant as Vancouver residents are not buying, it is rich wealthy foreigners. Celebrating the fact that we are selling our city to the highest foreign bidder. Levy then said, if Vancouver born children want to buy in the area, they will need to buy in Mission and commute.

Do the powers that be really want to drive all local born residents out of this city and replace them with Chinese? How does this benefit anyone?

Dave
Member
@patriotz: It doesn't follow that profitability is the same just because the dwelling spaces are equal. Laneway housing is typically a marginal cost to a home owner in which the land component isn't really factored into the equation. You can spend an extra couple hundred grand and get yourself a return on that investment. Let's say you purchased a tear down home for $800k and plan to densify it with row housing (obviously you would want more lots, but let's just stick to one for now). Another $100k to rezone, service and prep the lot. Each row house will come in around $300 to $400k, or about $700k for both. That's about $1.6 million before holding costs and profits. You would have to sell each row house for about $1 million to make any money. Does that sound like a… Read more »
Best place on meth
Member
Best place on meth

@Dave:

Do really think 40% of pre-tax income for a condo in Vancouver is affordable?

I don't believe that number even includes strata fees.

Dave
Member

@Best place on meth:

Yes I do. The average GVRD income can afford the average Vancouver condo. Keep in mind, those costs are for Vancouver, not Burnaby, Coquitlam or Richmond would have more affordable offerings.

Condo prices haven't taken off to the extent of SFHs this past year. I think condo prices are right where they should be. Detached homes have gotten ahead of where they should be.

That's not to say a correction won't take condo prices with it. I just don't see much price moderation happening.

patriotz
Member
Active Member

@Dave:

Of course laneway could still make economic sense if you had an existing dwelling in good shape, even if the municipalities allowed lot subdivisions for row housing.

But building on bare lots after teardowns greatly outnumbers laneway building today. That's the market saying that laneway is really just a niche rather than a general solution.

And what really counts for affordable ownership for families going forward is what's allowed in new developments east of the Port Mann.

jesse
Member
@Dave: "Laneway housing is typically a marginal cost to a home owner in which the land component isn’t really factored into the equation." A good comparison is strata duplex and multiplex, which the City does allow in certain areas. Detached "SFH" neighbourhoods have pushed back hard against rezoning for multiplex and, guess what, we get large houses with multiple suites instead, basically the same thing except now the homeowner needs to be part-time amateur landlord as well and share the common yard with whatever tenants they have at any given time. Density is, and has been, coming to Van West in the form of semi-legal dwellings. I expect current resident associations to continue to basically ignore it in the name of keeping up appearances of the way it used to be. I also expect the City to shamelessly ignore illegal… Read more »
Dave
Member

@jesse:

Jesse, row housing is located in other municipalities because you can build that product and make a profit. The number change completely once you get out of Vancouver. It's much easier to build that kind of product when you have a huge undeveloped site.

Zoning and bylaws don't enter into it. If it made sense, developers would be all over it.

Dave
Member

@patriotz:

I agree. New homes by far outnumber laneway housing.

Building affordable housing east of the Port Mann isn't a challenge. That's simple and it already exists, but I doubt you agree on my definition of affordability. If affordability was the challenge, then they wouldn't be building McMansions on 1/4 acre lots.

The challenge for the burbs in my opinion is transportation and community development, not affordability. I think the suburbs are ugly and poorly developed. I love the free market, but in this case it fails in some aspects.

Extremely rich Van h
Guest

@TPFKAA:

Racial Tension?

It is absurd because will not bethe case in Vancouver.Vancouver population is overwhelmingly Chinese who have the wealth and government support from China to prevent white Canadian to launch a smililar riot against Chinese like the one in 19 century.Nowadays China is great enough to be respect and fear of.Who would dear to provoke the lion.China is no more a sick man of Asia but a rising sun which will shine and nurture those who has chosen the right path but against those who dare to test the patient and power of Great China.American had learned a lesson during 1996 Taiwan Straight incident in which a Chinese nuclear Sub repelled the 7th fleet.

Best place on meth
Member
Best place on meth

@Dave:

>>>I think condo prices are right where they should be.<<<

Seriously? The benchmark is close to half a million.

40% pretax is 55% after tax. 55% of income to own a condo and that's with very low interest rates.

I consider that rate to be doable, but hardly affordable.

real_professional
Member

Check this out…

“We fear that the Vancouver market is becoming increasingly disconnected from local demand conditions and vulnerable to a painful correction, especially once interest rates resume their ascent,” said Robert Hogue, senior economist with RBC and author of the report.

http://www.financialpost.com/personal-finance/mor

Anonymouse
Guest
Anonymouse

@Best place on meth:

"40% pretax is 55% after tax. "

Isn't there a CMHC limit around 32%?

real_professional
Member

Sorry Noticed someone posted it already

Anonymouse
Guest
Anonymouse

@Anonymouse:

"This is a way of estimating the maximum home-related expenses you can afford to pay each month. To qualify for CMHC insurance, the total should not exceed 32% of your gross monthly household income."

patriotz
Member
Active Member

@Anonymouse:

“40% pretax is 55% after tax. ”

Isn’t there a CMHC limit around 32%?

Yes.

These numbers (along with the legendary 72% of income to own a house) are hypothetical numbers derived from median prices and median incomes. They do not represent what actual buyers are actually paying.

Anonymouse
Guest
Anonymouse

@patriotz:

"They do not represent what actual buyers are actually paying."

But it does suggest that if they're paying over 32% then they're doing so without CMHC insurance, and therefore are putting at least 25% down.

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