Leaky Condos, rule or exception?
Heres another article about leaky condos with big repair bills the owners can’t cover. Anyone bored of these yet?
It feels like it’s been more than a decade that we’ve been inundated with leaky condo stories in the news, yet the owners always seem shocked that they have to deal with the enormous repair bills.
This story is from Calgary, where perhaps it’s more of a surprise to people that here in Vancouver where we just expect it.
Hehr said other owners he has talked to are contemplating bankruptcy. “This is a serious, life changing event for people. It’s very tragic.”
Al Sajan, whose company 7 Sevens built the condo complex, said he is surprised to hear the complaints.
He told CBC News he followed building codes and passed all inspections.
“If you buy a car and 10 years later your engine goes bonkers, you can’t go back to the car manufacturer and say your car isn’t built right,” he said.
..maybe the developer should have gone for the name 8 Eights instead..
June 28th, 2011 at 8:21 pm 1
Like everywhere else in Canada, Calgary has seen practically no multi-unit rentals built for over a decade. As well, Calgary has probably led the country in conversion of multi-unit rentals to condos.
You will often hear it said from some quarters (you know who) that the reason multi-unit rentals are not built is because of rent controls. But Alberta has no rent controls of any kind. This is also true of many US markets that saw condo booms.
The article above points to the obvious reason – developers build and sell condos because it allows them to pocket the profits today and offload all the future risk to the condo buyers. There is no reason for them to build quality product because the buyers don't care.
If condo buyers were willing to pay a price in line with risk and return – and that would be well under half of current prices – multi-unit rentals would become a competitive product for developers.
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June 28th, 2011 at 11:27 pm 2
How did this article get past the editors? It's currently in the front headline section:
Canada's housing bubble close to bursting: Capital Economics
Prices could fall 25% in the next three years
http://www.vancouversun.com/business/Canada+housi…
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June 29th, 2011 at 12:11 am 3
@Jack:
"How did this article get past the editors? It’s currently in the front headline section"
They are a little more vigilant on the weekends, they still have to publish some reality.
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June 29th, 2011 at 12:13 am 4
Corrupt officials flee with $120 billion: report
http://www.vancouversun.com/business/Corrupt+offi…
Estimates by China's central bank that up to 18,000 corrupt officials have fled overseas with over $120 billion in stolen money in the last few years are undoubtedly well short of the truth.
The 68-page report by the People's Bank of China, dated 2008 and marked "confidential," was mistakenly posted on the bank's website a week ago and has since been removed.
But the analysis which cites specific examples of how corrupt officials and Communist party members have, since the mid 1990s channelled their illgotten gains into countries like Canada, the United States and Australia in return for resident status or citizenship, has caused uproar among Chinese netizens.
=======================
Not me…..I earned my wealth.
Pick (20) 6/49 winners in a row…never bet on Canucks….and have honest realtors and stockbroker.
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June 29th, 2011 at 12:14 am 5
http://www.marketwatch.com/story/is-china-driving…
Wow, at least someone factually reports on HAM…
Looks like its a real factor bears…
Another variable you missed in you long line of failed predictions…
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June 29th, 2011 at 12:18 am 6
@Mortgage Free:
Thanks for the link, further proof of a bubble.
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June 29th, 2011 at 12:38 am 7
“If you buy a car and 10 years later your engine goes bonkers, you can’t go back to the car manufacturer and say your car isn’t built right,” he said.
So….basically this developer is admitting that condos are not meant to last beyond ten years? Great! I'll keep that in mind next time I go condo shopping (which will be oh, never).
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June 29th, 2011 at 12:39 am 8
@Mortgage Free:
What "factual reports"? Any real statistics from objective sources?
No.
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June 29th, 2011 at 1:14 am 9
3.7% inflation rate and interest rates at 1%.
Time for Carney to make another speech how we should not get too much into debt. What a joke our institutions are becoming.
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June 29th, 2011 at 1:48 am 10
@paradox:
Yah, Carney is officially a joke. Quit yapping. I got a cost of living increase at work for 3.4 %, last few years was virtually nothing, proof is in the pudding, inflation has gone up over 3%, yet nothing. People just laugh at Carney now. Was out with a friend who owns 2 condos. He said I would buy another one if I could leverage, then we got onto bubbles and RE. He laughed and said low rates are here to stay. People really do think low rates are the "new way" No one is listening to Carney, people keep gorging on cheap money. You can talk all you want but you start to sound like a clown after a while. So what happened to the BOC mandate of 3% inflation? Seems to be the Govs are wanting to inflate their way out of debt.
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June 29th, 2011 at 1:50 am 11
"What “factual reports”? Any real statistics from objective sources?"
___________
According to a report by consultancy Colliers International, 2,527 homes were sold in the first quarter of 2011 in Vancouver, up 35% from a year earlier, with the spike in sales mainly due to a surge of investors from mainland China. The report noted that Chinese investors accounted for 29% of total home sales in the first three months, and stated that number is likely to keep rising.
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June 29th, 2011 at 1:51 am 12
@DaMann:
Oops, I meant BOC mandate of 2% inflation.
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June 29th, 2011 at 1:53 am 13
@Tick Tock:
I saw that Christy Clark says that BC will do nothing to discourage foreign investment in BC real estate. They welcome it. Just lost my vote!
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June 29th, 2011 at 1:56 am 14
@patriotz:
Developers are primarily in the business of development. That means you build something and sell it. The business of development is different than the business of rentals.
A percent of new condo sales goes directly into the rental stock. Many developments have buyers who take multiple units and rent them out. Why would a developer exclude a portion of their market? That makes no sense.
I give buyers more credit than you with respect to risk and return. We are in a low return environment. Real estate prices reflect that along with supply and demand.
You can't have your cake and eat it to. You criticize quality and then go on to claim that prices should be half. Believe it or not, the two are linked. It's also not possible to build condos that would sell for half current pricing. If prices dropped just 20 or 25%, development would essentially stop.
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June 29th, 2011 at 1:59 am 15
@paradox:
It's basically free money. You get paid to take on debt.
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June 29th, 2011 at 2:07 am 16
Christy Clark is a clown but that clown is our Premier, not good at all…
For all of Premier Christy Clark's upbeat qualities, she too often conveys the impression of someone who is making things up as she goes along.
Read more:
http://www.vancouversun.com/Clark+never+ending+ca…
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June 29th, 2011 at 2:11 am 17
HAM buying pre-sales in New West. Suckers. Look at it this way, stupid Chinese speculators are creating local construction jobs and adding to housing supply.
http://www.marketwatch.com/story/is-china-driving…
"In late May of this year, more than 400 people lined up to purchase apartments at a site in New Westminster City, a suburb of Vancouver. Within two and half hours of the start of the sale, all 153 units had been sold.
The otherwise unexceptional set of properties stood out on the sole basis that they attracted unprecedented excitement from Chinese investors.
Bill Morrison, head of sales for the project, told local media that they had not considered marketing the apartments to Chinese buyers until the project was 50% complete, but, “their demand was crazy and Chinese clients accounted for 40% of the total transactions."
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June 29th, 2011 at 2:12 am 18
@Dave:
Indeed they are. In RE, the higher the price (I mean within the market cycle for the same type of property), the lower the quality.
Reasons? The higher the price within the market cycle, the more willing buyers there are, and the less discriminating they are, so the less attention the builder has to give to quality. In addition, the more units that are being built at any given time, the more unskilled labour needs to used.
This isn't just theory – it's reality. As prices in Vancouver got higher and higher, quality became lower and lower.
The highest quality properties were built during the 1930s, when real prices were at an all time low. There were so few buyers that builders had to build good quality properties to get a sale, and there was so little building that only the best craftsmen could find work.
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June 29th, 2011 at 2:12 am 19
Well-to-do parents purchasing large houses, renting out portions to partly fund their children's studies.
Yeah…
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June 29th, 2011 at 2:15 am 20
@Dave:
Quote of the century. I guess that sums up the prevailing attitude today. No wonder we are standing at the precipice.
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June 29th, 2011 at 2:28 am 21
@patriotz:
Great idea. Let's start another Depression so that build quality goes up.
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June 29th, 2011 at 2:33 am 22
@Dave:
You (I mean the RE and financial industries) already have.
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June 29th, 2011 at 2:44 am 23
I think we mentioned something like this before on this blog…
Probably the biggest reason why Mr. Carney did not mention the possibility of a bubble is that its presence isn’t a necessary condition for warning Canadians about the importance of preparing themselves for a significant decline in housing prices in the medium term.
(Stephen Gordon is a professor of economics at Laval University in Quebec)
http://www.theglobeandmail.com/report-on-business…
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June 29th, 2011 at 2:56 am 24
@Laibach:
Gordon is an expert at obscuring the obvious:
Baloney. Back in 2005, every source which successfully identified the bubble in the US did so on the basis of price/rent and price/income. Lending standards were mentioned, if at all, as an enabling factor, not as a primary indication of a bubble.
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June 29th, 2011 at 3:28 am 25
@pricedoutfornow:
'“If you buy a car and 10 years later your engine goes bonkers, you can’t go back to the car manufacturer and say your car isn’t built right,” he said.'
Hyundai do 10 year engine warranties, don't they?
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June 29th, 2011 at 3:37 am 26
@ Dave:
It’s also not possible to build condos that would sell for half current pricing. If prices dropped just 20 or 25%, development would essentially stop.
=======
For anyone holding land they paid too much for, yes.
Current construction costs for high-spec townhouses are around $150/sq ft; low-rise residential $200/sq ft.
Once inflated site costs are removed there'll be plenty of developers able to turn a profit at far less than current asks.
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June 29th, 2011 at 3:42 am 27
@Anonymouse: That condo isn't even 10 years old. It was finished in 2004.
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June 29th, 2011 at 3:49 am 28
A mainsteam media outlet – and a massive one at that – that dares mention the words "housing," "bubble," and "bursting" in a single headline?
http://www.cbc.ca/news/business/story/2011/06/29/…
Damn, there's clearly change in the air. Sure, this particular article refers to the findings and opinion of just one research firm. But, just like all the bogus real estate industry crap that's been spewed before it, it's the PERCEPTION of the piece that's important. CBC *could* have softened the headline, but it didn't.
I've followed all of this very closely now for at least a couple of years, and I've never seen so much housing-negative "news" pour out of the mainstream media as I've seen in the past few weeks. Hell, Rob Carrick all on his own has been repsonsible for three or four real estate "reality check" articles/vids in just the last two months alone.
Rising interest rates? Sure, they'll have an effect when they eventually come to pass, but there's more than enough ammunition out there right freaking now for Joe Sixpack to say "NO!" when pushed by his partner and/or idiot friends to Buy Now or Be Priced Out Forever.
I truy believe we'll look back on the early summer of 2011 as the tipping point.
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June 29th, 2011 at 4:10 am 29
@gordholio:
"I’ve followed all of this very closely now for at least a couple of years, and I’ve never seen so much housing-negative “news” pour out of the mainstream media as I’ve seen in the past few weeks."
Ditto.
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June 29th, 2011 at 4:16 am 30
@gordholio:
I'm as bearish as they come, but I believe now that without higher rates this market will do what it has been doing for the last year or so…nothing. I hope I'm wrong because I don't see higher rates for a while now ( significantly higher anyways). The only good thing is that without constant price increases people can't keep HELOCing themselves out of trouble. I know a lot of people are using it as a safety net, they have no savings to bail themselves out.
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June 29th, 2011 at 4:38 am 31
Speaking to more and more of my friends, I think this bubble is closer to popping. The prevailing mindset (especially here in Van) is that property always goes up. It amazes me, my friends aren't dumb but the things they believe….
I have a buddy here from France. He's looking to get his permanent residence. He's a video game programmer, I suspect makes decent but not fantastic money. He asks me "so have you started looking to buy a place?". I told him that prices were too crazy, and I wasn't about to spend 7 large on a POS. He says "but just think how much it will be worth in 10 years, probably double or triple". So let me get this straight. All I have to do to retire in 10 years is buy a million $ house here. Wait 10 years, sell for $3 million and pocket the $2 as profit. Brilliant! What could go wrong?
Back in Houston I have another friend who "gets it". He just bought another house. $85K forclosure, looks only a few years old. Decent part of town. 3 bedrooms 2 bathrooms. Expects to rent it out for $1275 a month. When I tell people here about that, they say "yeah, that's Houston! Who wants to live there?". I'll tell you who. All the Californians who were priced out of Real Estate. Anyhow, I'd take the Texas economy any day over almost anything we have in Canada.
KK
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June 29th, 2011 at 5:04 am 32
24 patriotz Says: "Back in 2005, every source which successfully identified the bubble in the US did so on the basis of price/rent and price/income."
In 'Irrational Exuberance' Shiller tracked inflation adjusted (straighten him out Dave) match sales pairs across the last century:
http://www.econ.yale.edu/~shiller/data.htm
Chris Thornberg, then with the University of California, tracked a wide variety of consumer and business indicators. For those new to this, it's time once again to link arguably the most cogent and digestible talk on California's, and by extension America's, housing bubble:
http://www.youtube.com/watch?v=BiqEacwADlE
There are more views of the elephant than price/rent. Shiller's curve alone tells you all you'll ever need to know about where American home prices must settle. And Canada's.
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June 29th, 2011 at 5:11 am 33
Thousands of Alberta homes could rot Stucco covering linked to leaky walls; crisis could rival pine shakes scandal.
http://www.udialberta.com/2009.%20%20May%206.%20%…
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June 29th, 2011 at 5:20 am 34
I don't see any housing crash in the San Francisco core area or the Palo Alto area.
http://tinyurl.com/3av6se5
A lot more expensive than a typical west side home!!!!
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June 29th, 2011 at 5:24 am 35
@rksleung:
You can't be serious. Tell me you are not serious…
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June 29th, 2011 at 5:26 am 36
Me?
Got 6/49 numbers….all good..sitting outside office to collect on Saturday.
Next tip is calamri , olive oil and ouzo futures due to clazy Gleeks.
Gleeks may be emigrating to 33rd and Arbutus.
Watch many Beachcomber re-runs .
Maybe invest in NAIR future too.
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June 29th, 2011 at 5:33 am 37
@vanpire.
You should check those sold listings in the area before commenting. I don't see any housing crash at all and I am serious!!! All those houses are priced > 3M and a lot more expensive than a typical West side house here!!!
http://tinyurl.com/3lo9u64
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June 29th, 2011 at 5:35 am 38
@rksleung:
You don't see any housing crash in San Fransisco?
Can you look again?
http://www.zillow.com/local-info/CA-San-Francisco…
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June 29th, 2011 at 5:41 am 39
@fixie guy:
Since both real household incomes and real rents have been almost flat in the US (and here) for some time, real house prices have tracked price/income and price/rent very closely. You see the same trend no matter which you look at.
What I was taking issue with is Gordon's contention that prices in themselves are not indicators of a bubble. That's nonsense.
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June 29th, 2011 at 5:44 am 40
@Best place on meth: "Can you look again"
STOP FEEDING TROLLS WITH FACTS
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June 29th, 2011 at 5:46 am 41
@DaMann: @paradox:
Total inflation is 3.7% but core inflation is only 1.8% and unfortunately that is the number the BOC looks at with respects to interest rate policy.
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June 29th, 2011 at 5:48 am 42
@rksleung:
For anyone who actually looked at that San Francisco house for $4.5MIL from the troll's post, here's a reality check – a "typical" $4,500,000 house on Cambie:
http://www.realtor.ca/propertyDetails.aspx?proper…
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June 29th, 2011 at 5:49 am 43
#30 DaMann: I hear what you're saying and I've read your thoughts before and respect them, but my thoughts are that there's far more to it than just interest rates. Cost of living and inflation, for one. Can't buy houses if you're having a tough time filling your tank and if the price of groceries is killing you.
But more than the cost of living, the fact is that housing prices are insanely expensive. Sure, interest rates are low, but when the price of the item is so incredibly high, does it matter as much? Depends on the buyer for sure, but in my own situation for example, I'd MUCH rather buy low with higher rates than buy high with low rates.
And then there's popular sentiment. While there's still no shortage of fools in certain select areas who for some reason believe real estate prices will rise to infinity, I do think sentiment is changing. When I tell people I'm going to continue NOT buying, I don't get the same blank you're-a-nimrod stares that once were commonplace.
And then there's the mainstream media. Just lately it seems that bearish articles/columns/op-ed pieces outnumber or at least are evenly balanced with the re-written ReMax press releases and Cam Good-style bullsh*t. This is an entirely new wrinkle.
I'll add one more thing. The epicenter of the purported Chinese invasion, Richmond, currently has more than 2200 MLS listings. That's a TON. What does it mean? Hell if I know, but I can tell you that there are currently oodles of rental opportunities there, at somewhat decent prices too. Certainly better than they were even a year ago.
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June 29th, 2011 at 5:49 am 44
@Li Kai Shing:
You remind me of that episode of The Simpsons, where Krusty the Clown discovers that racist impressions of Chinese don't cut it anymore.
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June 29th, 2011 at 5:56 am 45
@vanpire:
That house on Cambie sold last week along with the other 10 along those 2 blocks.
It looks like sales to developers who are putting up towers across from QE park.
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June 29th, 2011 at 6:15 am 46
@Best place on meth:
So how do you sell two blocks of houses all at once? Are they all owned by agents/developers or the offers were simply to good to pass up???
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June 29th, 2011 at 6:18 am 47
@39 patriotz: "What I was taking issue with is Gordon’s contention that prices in themselves are not indicators of a bubble. That’s nonsense."
No disagreement, more reiterating that from multiple realistic, data driven perspectives it's a bubble.
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June 29th, 2011 at 6:25 am 48
@fixie guy:
The other point I should have made is that Gordon has got it completely backwards when he says you have to determine if lending practices are unsound to see if prices are excessive. It's the excessive prices that indicate that lending practices are unsound.
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June 29th, 2011 at 6:30 am 49
@vanpire:
Good question, I don't know how 2 blocks worth of houses get sold all at once but I went back to check the sales and there are 9 total.
After looking again it turns out the one you posted actually wasn't part of that group.
Maybe our resident developer can answer this.
Sold May 31/11 1 Jun 27/11 5109 CAMBIE ST $3,388,000 Vancouver West VW Cambie 3 2 V891557 7,688 1952
Sold May 31/11 1 Jun 27/11 5089 CAMBIE ST $3,388,000 Vancouver West VW Cambie 3 2 V891552 7,688 1952
Sold May 31/11 1 Jun 27/11 5069 CAMBIE ST $3,388,000 Vancouver West VW Cambie 6 4 V891547 7,688 1952
Sold May 31/11 1 Jun 27/11 5049 CAMBIE ST $3,388,000 Vancouver West VW Cambie 3 2 V891538 7,688 1952
Sold May 31/11 1 Jun 27/11 5029 CAMBIE ST $3,388,000 Vancouver West VW Cambie 3 2 V891529 7,688 1952
Sold May 31/11 1 Jun 27/11 4991 CAMBIE ST $3,388,000 Vancouver West VW Cambie 5 2 V891513 7,688 1953
Sold May 31/11 1 Jun 27/11 4977 CAMBIE ST $3,498,000 Vancouver West VW Cambie 5 2 V891510 7,875 1953
Sold May 31/11 1 Jun 27/11 4963 CAMBIE ST $3,388,000 Vancouver West VW Cambie 5 2 V891506 7,438 1953
Sold May 31/11 1 Jun 27/11 4949 CAMBIE ST $3,388,000 Vancouver West VW Cambie 5 3 V891503 7,690 1953
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June 29th, 2011 at 6:45 am 50
@Anonymouse:
You right…
Anonymous sounds like a good new handle.
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June 29th, 2011 at 6:45 am 51
@vanpire: Uhm… the houses look kind of the same between here and San Fran link. Where's the difference that justify Vancouver house is more over priced than San Fran?
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June 29th, 2011 at 6:46 am 52
Market Watch Article :http://www.marketwatch.com/story/is-china-driving-property-bubbles-abroad-2011-06-28
"Scott Brown, vice president of Colliers’ Residential Project Marketing Services in western Canada, told Caixin that housing prices in Vancouver and Toronto are now at high levels, but home rents have yet to rise, with many rental returns already as low as 2%.
Factoring in loan interest, property taxes and property management fees, returns on investment are next to nothing.
Zhang told Caixin: “Chinese people’s anticipation for property appreciation far exceeds expectations for rental income.”
Even so, the wave of property investment from China looks dead set to grow."
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June 29th, 2011 at 6:47 am 53
Repost the link:
http://www.marketwatch.com/story/is-china-driving…
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June 29th, 2011 at 6:49 am 54
@Best place on meth: So that's like almost $40M just for the land. I wonder how many units they will be built? 100 units?
Actually for that area, I don't mind having some towers up to 20 floors instead of just 6 storeys complex. The high density would help justify the costs of building the Canada Line station that was originally planned to be there. Personally I would prefer that location over Broadway & Cambie for condos and TH renting.
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June 29th, 2011 at 6:53 am 55
I asked you to look into the Pacific Heights area for facts that the area has a crash. You gave me back the BS that the entire San Francisco dropped in price. Real estate is about location. Face it. No one forced a gun at you to buy at those shabby regions in San Francisco while there are pretigious regions like Pacific Heights, Presidio, Palo Alto that has withstood the crashes.
You armchair commentators are welcomed to wait for the so called housing crash in Vancouver while those Cambie residents already made out riches like you will never make in your life time.
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June 29th, 2011 at 6:55 am 56
China's debt bomb:
As the world watches the Greek credit crisis unfold, a Sino-debt disaster is brewing halfway around the world.
http://finance.fortune.cnn.com/2011/06/28/chinas-…
Despite talk of a burgeoning middle class that can support the Chinese economy with consumption, the country still relies on exports to keep the economy growing fast enough to create jobs for its large population. It takes a per-capita GDP of $5,000 to create meaningful discretionary spending power in China, writes economist A. Gary Shilling. But Shilling says only about 8% of the population has that kind of economic clout. And with inflation threatening to run out of control, citizens will need higher wages, too.
What's happening in China should sound familiar because it is reminiscent of what happened here in the US. Confronted by an economy that couldn't deliver real wealth to the people, our bureaucrats loosened borrowing standards in the 1990s. The result: an uptick in local government spending, a real estate bubble that made investors feel artificially wealthy, a construction boom that created jobs, and debt that can't be repaid.
China even exacerbated the credit problem with securitization, just like we did, spreading potentially toxic loans around to investors. So-called informal securitization became popular (but was then frozen in 2010) in China, according to a special report published last year by Fitch Ratings. This simply means that the Chinese re-packaged bank loans (rather than mortgage-backed bonds) into investment products. The trend "[distorted] Chinese banks' credit data at an institutional and system level, resulting in pervasive understatement of credit growth and credit exposure," according to a statement from Fitch.
The question is not whether China will hit the debt wall, but when.
======================================================
Follow the money…Goldman Sachs et al set up China too…
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June 29th, 2011 at 7:03 am 57
@space889:
Much higher rents across the board for all properties in SF, compared to Vancouver?
Will that do?
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June 29th, 2011 at 7:03 am 58
@Best place on meth:
It's because the sale of each lot was conditional on sale of all the lots in the planned amalgamation. You need a deal with all 9 to close on any individual lot. Once all the deals are signed, then the subjects to sale are removed. It would obviously be foolish to buy 8 lots with the hopes of eventually closing on the last one. That's why developers make these types of deals.
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June 29th, 2011 at 7:06 am 59
Each of those resident on Cambie has struck a jackpot. Is that fair? Who here can make 3.3M (current money) in his life-time after tax?
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June 29th, 2011 at 7:11 am 60
@Anonputz: "it is reminiscent of what happened here in the US"
The way I heard it put is that loans in China are made based on quota, not interest rate bidding. In other words, real rates are exorbitantly low.
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June 29th, 2011 at 7:17 am 61
@lorem ipsum:
Your costs are low. You might get near that with something very basic with large volumes.
In any case, construction costs are only part of the overall cost of a development. Land is obviously a big one, but there are many more. Let's say a condo sells for $450/ft2. There is no way anybody could build and sell anything at $225/ft2 and make a profit. New development would cease overnight if prices were to fall by half.
Just look at the US market and the level of construction. It's at the lowest level in the post WWII period, which is stunning when you consider all the population growth.
If prices in Vancouver fell by 20 to 25%, construction would quickly drop by more than half.
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June 29th, 2011 at 7:19 am 62
@rksleung:
Don't worry, the taxpayer took a chunk of that money with the PTT. You don't hit the jackpot by not owning assets. You have to be in it to win it.
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June 29th, 2011 at 7:29 am 63
@Dave/akaRpb:
Not much happening at your blog, you must be bored.
I'll try to get you a job in the Econ Dept
Is Aaron available as well?
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June 29th, 2011 at 7:32 am 64
@Dave:
No argument there, but there would still be building, just as there is still building in most US markets – even Las Vegas. As there was still building in Vancouver in the 1930's.
When house prices drop, builders simply reduce the costs that they pay for land (especially), labour, and materials, and take a smaller profit margin. If you want to know what the floor is, simply look at the cheapest Canadian cities where housing is currently being built. And take some off of that, because even they have some downside.
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June 29th, 2011 at 7:32 am 65
@Dave, funny how these resident bloggers didn't comment a bit on how those Cambie residents made out riches. I thought they said real estate investment sucks in Vancouver.
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June 29th, 2011 at 7:42 am 66
@Dave/akaRob:
Builders could build, and still make money if prices dropped 40%
Just for starters, they wouldn't have to pay 1mil
for a crackshack.
Builders would do fine it's the suckers who you sold to during this bubble who are priced in for ever.
But fly at her as you would say with your double talk.
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June 29th, 2011 at 7:53 am 67
@rksleung:
>>>I asked you to look into the Pacific Heights area for facts that the area has a crash. You gave me back the BS that the entire San Francisco dropped in price. Real estate is about location. Face it.<<<
Oh, Pacific Heights. Right.
The area that's only dropped 20% so far.
http://www.zillow.com/local-info/CA-San-Francisco…
Are you done now?
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June 29th, 2011 at 7:55 am 68
@Dave: If prices do fall, the developer would eat a year or more of price drops unless it's pre-sold. Why take that risk? We saw this in late 2008 and into 2009; a large whack of developers wouldn't break ground because they had no certainty on recovering their costs. Even a paltry 5% annualized drop would be catastrophic for these guys if they're carrying the land. Am I wrong?
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June 29th, 2011 at 7:58 am 69
@rksleung:
We didn't say it sucked 10, 20, 30 or however many years ago the owners bought those houses.
Get it?
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June 29th, 2011 at 8:01 am 70
Yesterday I attended the grad 7 ceremony in surrey. There were about 80 students graduating.
They had to say where they saw themselves in 15 years.
Almost 90 percent of the students saw themselves living in a big house or mansion with the majority of the professions as video game testers ( approx 80% of the boys) and fashion designers (approx 80% of the girls).
Not one of them chose a real trade (engineer, scientist, doctor etc) as they future profession.
I was struck however by one of them who said that he will be probably living in a basement and only hoped to have a job, any job.
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June 29th, 2011 at 8:13 am 71
@paradox:
Mrs. Krabappel: "Seymour, you have to think of the children's future."
Principal Skinner: "Oh, Edna. We all know that these children HAVE no future."
[everyone stops, stares]
Principal Skinner: "Prove me wrong, children! Prove me wrong."
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June 29th, 2011 at 8:14 am 72
@paradox: "I was struck however by one of them who said that he will be probably living in a basement and only hoped to have a job, any job."
He'd make a good mugger by the sound of it.
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June 29th, 2011 at 8:16 am 73
@rp1:
He's the one who will actually do quite well.
The wannabe high-paid gamers and fashionistas are the ones who will end up in basements.
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June 29th, 2011 at 8:17 am 74
@paradox:
How is it that a gamer can't live in a big mansion? I know people from EA who own homes in the West side living in 2 million dollar homes. Anyone can own a big mansion if they have balls to gamble with their money. Only those who are scared of taking risks fail to make it big.
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June 29th, 2011 at 8:22 am 75
Re Cambie Lots:
Not surprised…the COV updated OCP created Cambie Corridor.
Start of the diaspora.
Vancouver Sun reporter (Trevor Boddie?) noted this a few years ago.
COV was running out of land for Hi-Density…thus the Canada Line was in sync with this vision to rezone surrounding lands.
What was interesting was the demogrpahics….they realized a high proportion of the owners were Asian, hence less political resistance than that of the Arbutus Corridor.
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June 29th, 2011 at 8:42 am 76
@paradox: How can people vote up this post by paradox. You people are so shallow. So a gamer is not allowed to live in mansions. Obviously, Paradox is living in his silly basement and never took the risk to buy a property ever in his puny life.
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June 29th, 2011 at 8:52 am 77
@Supraboy: I know you're just a troll, and a shitty one at that, but as an ex-videogame tester, I can tell you that dreams of home ownership for game testers are just that…dreams. How can anyone expect to buy a condo, let alone a house, on only $13 an hour?!?!
Most of these graduating kids will likely run from that profession after a year, max! I've lived the lifestyle, it's not as glamorous as people think. Long hours, and low pay.
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June 29th, 2011 at 9:00 am 78
@Supraboy:
Are you retarded or something? Take a risk how? Running guns or cooking meth? How about a nice well made pornographic website wih a girlfriend doing live chat – I'm sure programmers can do this sort of stuff.
What else can kids do these days to actually afford a place of their own.
Troll.
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June 29th, 2011 at 9:04 am 79
@paradox:
Congratulations on graduating! Good luck next year in high school.
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June 29th, 2011 at 9:27 am 80
@paradox: ….There were about 80 students graduating. They had to say where they saw themselves in 15 years…..
I don't think they'll have to worry about affording homes in 15 years. This fart will long since have popped and things will be back to normal for a very long time.
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June 29th, 2011 at 9:32 am 81
Sleazy realwhore is sleazy
http://www.sellingbc.ca/FREE_DOWNPAYMENT_PROGRAM/…
Craigslist ad for this:
http://vancouver.en.craigslist.ca/rds/apa/2458233…
Thanks Carney for creating more fear.
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June 29th, 2011 at 9:40 am 82
@Supraboy:
Supra, you are like laxative. Whenever you say something I have to take a dump. Thanks.
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June 29th, 2011 at 9:44 am 83
@Patiently Waiting:
Flagged as spam.
Prices AND rates rise? Basic economics aren't a part of the realtor license I guess, unless you count, "real estate always goes up"
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June 29th, 2011 at 10:04 am 84
@Patiently Waiting:
Sleazy as well as creepy.
This is not what I want to see in the "about me" section of realtors website.
"Unfortunately, a few years ago, my husband passed away, and I have now moved to Delta. I am pleased to say that I have been acquainted with a new man for a few years, and in October of 2007 we were married. So my personal life has taken a happy turn."
Fuck off lady.
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June 29th, 2011 at 10:19 am 85
@Patiently Waiting:
What do you think the odds are she says there's no bubble in Vancouver because we have prudent lending standards and then refers people to her "buy a home with no money down" website?
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June 29th, 2011 at 10:40 am 86
A condo for sell on Kijiji Vancouver
in the rental section.
"staged" with thrift store furniture.
Priced at $888,800.
Amateur speculators are becoming creative!
http://vancouver.kijiji.ca/c-real-estate-apartmen…
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June 29th, 2011 at 11:35 am 87
New Listings 257
Price Changes 113
Sold Listings 173
TI: 16086
Vist my website for more stats: http://www.laurenandpaul.ca
And join my Facebook page for weekly and monthly stat updates, and more: http://www.facebook.com/pages/Metro-Vancouver-Rea…
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June 29th, 2011 at 11:51 am 88
@Dave:
Yet they still build, and they still make a profit. New construction is low because demand is low, not because prices are down 35%.
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June 29th, 2011 at 12:04 pm 89
@Best place on meth:
Pssh, 20%! I declare a flat market.
(sorry couldn't help myself)
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June 29th, 2011 at 12:23 pm 90
Another stellar month for Australian property prices in May, capital cities saw prices down 0.3% for the month, 1.2% for the quarter, and 2.3% for the year. Here are the year over year changes to the end of May 2011:
Sydney 1.0%
Adelaide -2.6%
Melbourne -2.9%
Brisbane – 5.9%
Perth – 7.5%
The silver lining is the fact that declining prices mean rental yields are on the way up and are now a stellar 5%! Of course if you think 8% is the kind of yield you'd like on a unit then prices still need to fall 37.5%.
The oddest part of this report is the claim that the dwelling price to disposable income ratio is now 4.2, the lowest it's been since June 2003. With the median dwelling price at $420,000, this implies that the (median? average?) disposable income of an Australian household is $100,000, sorry but this is nowhere near true.
http://www.rpdata.com/research/rents_rise_while_h…
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June 29th, 2011 at 12:27 pm 91
@paradox:
I think the key to this comment is "…in Surrey". If you had've attended a graduation in Kits the students would be aspiring actors. Or on the Westside you would've heard the 80 students saying they wanted to be corrupt party officials.
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June 29th, 2011 at 1:10 pm 92
wow, you lads are quite ornery tonight! Lots of flaming.
1. Leaky condos. When construction starts to slow down (as I think Calgary has) these stories tend to emerge. I'm convinced the builders who are desperate for work start exaggerating the leaky condo angle to scare condo associations into doing unnecessary work. All condos leak eventually, so much of it is maintenance instead of construction problems. No need for alarmism.
2. Land prices are notoriously sticky in Vancouver at the moment. Even when prices of condos dropped in 2008/09 land didn't drop much at all. We have lots of land owners who made a killing over the last 10 years and are flush with cash. They can wait-out a slow-down. So if land does not drop in price, and condo prices fall it adds to one big problem: developers can't build at a profit. So they start blowing out staff. Look to the trades/professions at the front of the planning cycle – they will be the first to go:
- architects/designers
- excavation
- re-bar/concrete
The trades at the end of the cycle are so dumb they don't see any of this coming. I remember chatting with carpenters and interior decorators who were oblivious to the last slow down.
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June 29th, 2011 at 3:04 pm 93
Friend sent to me. Self explanatory. Average price of $591,000 for a closet in Vancouver still doesn't seem cheap to me.
Published: June 22, 2011 1:00 PM
Updated: June 22, 2011 1:56 PM
Foreign investors make up a tiny share of the Lower Mainland real estate market but tend to buy much more expensive homes.
Those are the latest conclusions of researchers at Urban Futures who found just 0.4 per cent of all homes sold in the region in 2010 were bought by owners with a foreign mailing address.
"We're dealing with pretty small numbers here," Urban Futures economist Ryan Berlin said, adding the proportion rises to 0.7 per cent when just condos and apartments are considered.
Realtors have anecdotally reported an influx of foreign buyers from mainland China and there's been growing debate on whether the phenomenon is driving housing prices up and hurting home affordability.
Bank of Canada governor Mark Carney recently said an influx of Asian wealth is leading to some "extreme" valuations in Vancouver's housing market.
Berlin simply doesn't see the evidence.
"There's very little hard data out there that shows foreign investors are indeed having a significant impact on our real estate markets," he said.
Urban Futures found a total of 195 sales out of 55,512 in the Lower Mainland last year were to foreign investors.
That doesn't count foreign buyers who use a local lawyer or building manager to receive mail or immigrants who are buying and perhaps living here part-time.
But even doubling or tripling the number of foreign investor sales to account for those cases still leaves insignificant numbers, he said.
Foreign buyers have a much greater appetite for more expensive homes than local buyers, according to Berlin's calculations.
The foreign investors who bought in 2010 paid on average twice as much for a condo as other buyers. They paid 60 per cent more on average for detached houses.
A previous report this spring by Landcor Data Corp. had also linked a large proportion of luxury home sales in recent years to buyers from mainland China. Landcor found that activity is concentrated in a few areas, particularly Vancouver's west side, the North Shore, Richmond and South Surrey.
Berlin said Metro Vancouver residents shouldn't be spooked by the average real estate prices in the region, which are increasingly deceptive as they are skewed by the most expensive properties on the market.
The region's average sale price for a detached home hit $810,000 in 2010.
But if you exclude the priciest 20 per cent of homes that went for as much as $17.5 million, Berlin notes, the average price for the rest of the market is $591,000.
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June 29th, 2011 at 4:45 pm 94
The last couple of paragraphs are particularly funny. Even by Vancouver Sun standards. Are they unaware of the situation in the country with ten times our population a few miles to the south.
http://www.vancouversun.com/business/Bubble+talk+…
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June 29th, 2011 at 4:49 pm 95
"But if you exclude the priciest 20 per cent of homes…"
And if you exclude the priciest 50% it's even lower still. Funny how that works.
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June 29th, 2011 at 6:42 pm 96
@Fast:
Not to mention Japan.
The idea that there is a shortage of dwelling space in the world is ridiculous. I think that someone once calculated that if you built out the whole of Texas to the same density as Dallas (and that's not very high of course), it could house the entire global population.
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June 30th, 2011 at 10:05 pm 97
@604x:
Hmmm … are YOU involved in development or construction trades?
Those who have their sh*t together and are good at what they do were oblivious to "the last slow down" because they kept their heads down and continued working!
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