Friday Free-for-all!

Hey everyone, happy long weekend to you! Let’s do our regular open topic discussion thing.

– there may be stories added here later

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

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specialfx3000
Member
specialfx3000

@Aleks:

You said "Unless the rent on an equivalent unit is more than the cost of the mortgage + property tax + maintenance, there is no reason to buy."

You too are missing the opportunity cost of the down payment.

So say your rent is $2000/month on a $600K property. If you buy it with cash, mortgage is 0, Prop tax is say $200 and maintenance is $300. Your monthly cost is $500 to own vs. $2000 to rent.

LordHuggington
Guest
LordHuggington

Saw this over at Mish's:

http://globaleconomicanalysis.blogspot.com/2011/0

Basically, a 475,000 sq. ft. building auctioned off for $7.15 million dollars in Cleveland ($15 per sq. ft.!), with an assessed value of $44 million. Just goes to show what the market thinks of its value. I wouldn't be surprised to see something like this played out here repeatedly. (In terms of business clout, hasn't Vancouver ranked about on par with Cleveland for North American cities? I vaguely remember someone linking to something along those lines here, but am not sure)

space889
Guest
space889

A couple more links for you:

5 Things a new homeonwer should do:
http://www.theglobeandmail.com/globe-investor/per

Not sure how buying a house would change your tax situation? As far as I know, outside of renting out a basement or running a business from the home, there is no tax implication from owning a home? Especially now that home renovation tax credit is gone?

And a second one – Relax your debt is not out of control:
http://www.theglobeandmail.com/report-on-business

Aleks
Guest
Aleks

IMO, it boils down to whether you truly believe we’re at a peak or not.

I disagree, it has nothing to do with what the market will do next and everything to do with the price : rent ratio. Get out your calculator and crunch the numbers. Unless the rent on an equivalent unit is more than the cost of the mortgage + property tax + maintenance, there is no reason to buy. Every month you rent is more money in your pocket. We have no way of knowing when the market will correct, but we can be absolutely certain whether an individual property is overpriced or not.

M-
Member
@Potential Buyer: The "low interest line of credit" that you're interested in won't be any larger than your equity in the condo– basically, your down payment will be the potential value of the secured line of credit. So you already have 100% of that security right now, today, in your bank account. Of course, if the market goes up, your potential SLOC could also rise, but if the market goes down, your SLOC security could dry up. Also, as nuxfan said, beware of leaky buildings. "Moisture" infiltration problems can be costly. MY old condo (prior to my buying it) had been a repaired leaker. Cost? $25K per unit. A townhouse that my wife and I were looking at was leaky, and had an estimated $150K/unit repair bill. Ouch! Other things… Beware the realtor commission when you eventually sell your apartment.… Read more »
nuxfan
Member
nuxfan
@Potential Buyer: 450/sqft seems reasonable for the westside based on today's prices – the question you're asking in a roundabout way is if people think that those prices will hold, go up, or go down. No one can predict the future. In terms of the condo itself though, I would go 2 bed over 1 (better resale), and look closely at the condo building itself – you'll find plenty of "bargains" out there, which may or may not come with problems that you'll have to pay for in the end. Condo sales are so dependent on the building itself. new or old? need to renovate? proactive strata? looming repairs? I personally prefer older buildings for condo's (which the westside does have), 70's and 80's. They tend to be better built structurally, and bigger inside than newer stock. Its easy to… Read more »
specialfx3000
Member
specialfx3000

@Potential Buyer:

IMO, it boils down to whether you truly believe we're at a peak or not.

If you believe we're at the peak and things either go sideways for years (or even drop), that down-payment you speak of will be stuck in this asset whereas if you keep renting and invest your downpayment (yes, there's risk there too), than maybe renting can still make sense. Do not forget the opportunity cost on your downpayment as part of your overall cost comparison.

Devore
Member
Devore

@kansai92: I was rolling my eyes too when I read from Squamish or Mission to downtown in 30-45 minutes… uhm, when? at 3 am?

Fact is, if you're buying a house in the burbs from your rental downtown or nearby, because that's all you can afford, and need to commute to work downtown, prepare yourself to waking up an hour earlier every single day of your life that you live there, and getting home later.

But hey, we're building equity here, man up and stop complaining!

900kCrackHouse
Guest
900kCrackHouse

@Potential Buyer: I feel your pain and am in a similar situation. What stops me from buying right now is the fear that I may be buying right at the top of the market with all of the uncertainty out there right now. Did you watch the video posted earlier on Australia?

I'm not going to make predictions (as others on this site do and have been incredibly wrong so far).

Potential Buyer
Guest
Potential Buyer
I've been a lurker on this site for quite some time now and I just wanted to ask for peoples opinion of buying a small 2 bed condo. I've been living and working with my wife in downtown and renting for the past 5 years now. I am now in the position, through savings and some assistance from family, to be able to put a substantial down payment on an apartment. I know most of you profess the virtues of rent but I have calculated that with my downpayment, I will be able to pay less per month on the mortgage/tax/strata compared to a similarly sized rental unit. Also, I would love to have the security of having access to a low interest line of credit. I've been looking mostly west of main and found some gems that seemed affordable… Read more »
space889
Guest
space889

@kansai92: I don't think I've ever done in 45mins during non-rush hours but then I do drive a bit slower with all the curves and such.

But did you notice the prices? Those aren't exactly cheap prices either. A lot are like $600K to $700K+!!! If they were like $300K or under, fine. But $700K+ with nighmare commute time and options?? that's examples of right price @ right location?? wow…

space889
Guest
space889

@900kCrackHouse: You can have two out three: speed, quality, price.

I guess maybe people who hire the Indian builders prefer really cheap and quick?

Also with the way construction industry works, can you really blame the contractors for doing shoddy jobs when they can get paid the same amount of $$ much more quickly (hence more jobs and income in a calendar year) without having to worry about liability? I think this probably goes for 90% of builders here regardless of race, though some are probably way worse than others.

Buyers protection is really lacking in BC.

kansai92
Guest
kansai92

http://www.vancouversun.com/business/Looking+home

Of course it's not dire. Why stop at Squamish or Mission.

I hear Prince Rupert is great this time of year.

I'd love to see someone get to downtown from Squamish during morning rush hour in 45 minutes. I'll give that person $100.

What is this, Amazing Race?

space889
Guest
space889

@jsg: You forgot about the part where Canada wouldn't deport you back to China to face death penalty for embezzlement, tax evasion, corruption, bribery, etc without securing a promise from the Chinese government that it will press for a death penalty or ensure your safety in prison. Not to mention all the other available routes of refugee claims you can pursue. Lastly add in the fact that you might get all the legal work done for you on Canadian taxpayer's expense and collecting social welfare support at the same time!

I don't believe Australia is as lenient or as generous as Canada.

Anonymous
Guest
Anonymous

@Hazuchan

Yes, clearly athletes getting paid millions of dollars who accept slightly less than market value with no real impact on standard of living to play for a winning franchise are exactly the same as middle managers making 60k a year who have to commute from Mission just to have a yard for a dog to shit in.

Come on. I mean, seriously?

vanpire
Guest
vanpire

@900kCrackHouse:

What do you think? Of course I'm renting. I love freedom and independence above anything else. Living the life of a slave isn't exactly my forte.

900kCrackHouse
Guest
900kCrackHouse

@vanpire: And you are renting so you can afford to do this? 🙂

vanpire
Guest
vanpire

@data junkie:

I am myself contemplating taking a pay cut to change to a job where I will actually be doing something relevant all day rather than sitting at a desk building log cabins out of pencils and posting things here.

I actually did the opposite – I took a pay cut so I can have a job where I do nothing all day besides posting here. Say, where did you learn how to build log cabins out of pencils? Sounds interesting…

data junkie
Guest
data junkie

@Hazuchan: The difference is that unlike most businesses in Vancouver, the Canucks are a world-class competitive organization in hockey (not jingoism, just a statement of fact), so they are essentially agreeing to a pay cut in order to be part of an effective organization that has a chance of winning.

Unless you are a senior manager at Lululemon or one of the other few world class competitors here in Vancouver, there's no real equivalent. I am myself contemplating taking a pay cut to change to a job where I will actually be doing something relevant all day rather than sitting at a desk building log cabins out of pencils and posting things here.

Of course, I can afford to do so because I'm a renter and have a lot more disposable income than most…

900kCrackHouse
Guest
900kCrackHouse

@WFT?: Indian builders didn't build larger complexes until more recently. Have you ever been to some of the Indian built complexes in Surrey? Quality is ABSOLUTELY brutal. I'm talking build quality, I can't attest to structural. I've looked at some of the Indian built houses in East Van, you can tell by looking at the outside of the house that some of the lines aren't straight. So yes, I think it is a fair statement that the leaky Condo's weren't built by Indian builders… but just think of the disaster we would have on our hands if they were…

WFT?
Guest
WFT?

@900kCrackHouse:

Do Indians not know how to build houses? I think that the developers of leaky real estate all non Indian.

Hazuchan
Guest
Hazuchan

Interesting that a few Canucks have signed in what appears to be "lower than market" wages to stay in Vancouver. Sedins, now Hansen…

http://www.theprovince.com/sports/Canucks+have+ba

Is this not endemic of the Vancouver labour mentality?

jsg
Guest
jsg

Among the Asians(Chinese, Japanese, and Koreans), Australia is favored either among two categories

a) people who don't have the skills or money to come to Vancouver or or Toronto. Australia's immigration policies are looser than those in Canada.

or

b) people who prefer a warm climate.

Other than A) and B) , they mostly prefer to come to Canada instead.

900kCrackHouse
Guest
900kCrackHouse

@Van MD: Good post, although I thought the earie background music was a bit over-dramatic. Part of me hopes our turn comes soon, but the other part doesn't because of the implications on the wider economy.

I still don't see any proof of the droping prices in the lower mainland that people have been talking about over the last few days. I wouldn't call an Indian built house sitting on a 3000sq ft lot in a dumpy neighborhood in Surrey for 400K a good deal personally.

space889
Guest
space889
@fixie guy: Uhm…weren't you asking how is it possible for rich immigrants to buy multi-million dollar houses but yet report very little income? I gave you a possible explanation and your response was telling me to how fuck up and unfair the immigration process is? Impling I'm in support of such policies when I have stated several times that I'm actually not? wtf?? If you think allowing rich non-immigrants in who then leeches off the system is bad then go talk to your elected representatives and get the laws changed. Personally I don't think anyone here will be against that. But please don't imply that I'm in support of these immigrants when I'm not. The fact that I voice my opinions against what I view as unneccessary China bashing doesn't mean I'm automatically in support of rich foreign fat cats… Read more »