Friday Free-for-all!

It’s summer and it’s the end of another work week, what’s not to like? Friday is the day we do our regular end of the week news round up and open topic discussion thread for the weekend, so let’s hop to it! Here are a few recent stories to kick off the chat:

BCREA predicts lower prices in 2012
Debunking the drivers of Vancouver RE prices
Vancouver prices never go down
Mayor blames wealthy foreigners
What’s happening in Richmond?
Paulb starts tracking market trend data by area
BC Ferries proposed service cuts to pay for executive salaries
BC Casinos to shift away from money laundering services
The end of free money for Wall Street?
Buying now cheaper than renting in 37 of 50 US cities

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

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Van MD
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Van MD

"Hong Kong resale housing market enters correction period. Average price drops 17.5% from $587,200 (June/11) to $484,700 CAD (Aug/11)"

– Aug 24, 2011 Hong Kong News

Main reason for the decline is the drop in sales of the high and mid-high end homes. Sales of high end homes (>$1.27M CAD) declined 35% month-over-month. Sales of mid-high end homes ($632,800-$1.27M CAD) declined 30%.

It also appeared (in other news) that RE market in major Chinese cities including Beijing, Shanghai, Shenzhen, Guangzhou are facing 'correction' as well as a result of government crackdown on housing speculation and restriction on credits.

It seems like HAM is facing a crunch back in its homeworld

<a href="http://translate.google.com/translate?js=n&prev=_t&hl=en&ie=UTF-8&layout=2&eotf=1&sl=zh-CN&tl=en&u=http%3A%2F%2 Fwww.chinareviewnews.com%2Fdoc%2F1018%2F1%2F0%2F9%2F101810950.html%3Fcoluid%3D7%26kindid%3D0%26docid%3D101810950%26mdate%3D0824094351″ target=”_blank”>http://translate.google.com/translate?js=n&pr…” target=”_blank”>Fwww.chinareviewnews.com%2Fdoc%2F1018%2F1%2F0%2F9%2F101810950.html%3Fcoluid%3D7%26kindid%3D0%26docid%3D101810950%26mdate%3D0824094351

Anonymous
Guest
Anonymous

@Van MD:

Doesn't that mean more HAM for Vancouver as they go seeking the last inflating market on earth?

Confucious
Guest
Confucious

It means that there will be less HAM, as their China real estateholdings take a beating.

specialfx3000
Member
specialfx3000

A continuation from yesterday's post about an article on the Straight.

http://www.straight.com/article-436861/vancouver/

I give the Straight credit for posting both Gordo and YLTNBoomerang's comments.

Vote them both up… good Friday morning read. 🙂

Anonymous
Guest
Anonymous

@specialfx3000: Great comments there! Gordo really nails it, I'm also give them credit for posting it, weird that it took them a full day to approve it though.

gordholio
Member
2, Anonymous: Is the Vancouver market really still infating? I would think that even the most fervent "bull" (and it really is "bull") has to admit it's topped out and wilting. Re Georgia Straight: Yep, you gotta give 'em props for posting the responses they've posted so far. Mine was, admittedly, pretty freaking long. And pretty harsh all things considered. Funny, I probably won't ever go back to owning because to us, renting really is a far, far better option. But this constant realtor-media festival of bullshit just makes me so incredibly angry. The text of this particular piece was really quite balanced, but it's the headline that set me off. It's the perception given off by headlines like this that drives me up the proverbial wall. Just FYI, the Globe and Mail reporter who wrote that big piece earlier… Read more »
Anonymous
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Anonymous

I was having dinner with friends last week and the topic of Richmond real estate came up.

Is it really true that many Chinese in Richmond are scared of a possible earthquake after seeing the images from Japan and trying to get out of the market?

pricedoutfornow
Guest
pricedoutfornow
@gordholio: I agree with you. I, however, have stopped trying to convince people in Vancouver that real estate is overvalued. What's the point? It's not worth my effort. I find it's much more satisfying to agree with them-they have no idea I'm being sarcastic. When they say things like "Real estate only goes up" and "Vancouver is the best place on earth!" I smile and nod "Absolutely!!" I say, all the while, laughing inside "Fools" I think. I've found that the "real estate always goes up" argument is dying in other places of the province. People on my old street in Kelowna saw their property values go from around $500k in 2008 to now $350k-they are no longer cheering so much for real estate there. Others have condos that are underwater and are having problems finding tenants. I do believe… Read more »
gordholio
Member

7, Anonymous. Yes, that is the rumor. Can anyone substantiate this with fact?

But on top of that, it would appear the "Asian hordes" may have sensed a topping of the market. Essentially, you cannot flip if your deal flops.

I was speaking with a Richmond realtor a few weeks ago – a fairly honest guy I met through our mutual love of high-end audio gear. For what it's worth, he told me prices are off an average of 10%, and that he fully expects them to be off an additional 5 – 10% by year end.

If you go strictly by the MLS site's Map view, there are currently 2200-plus properties on the market in Richmond.

rp1
Guest
rp1

I love your comment on the Straight, gord. The "Bullshit Festival" 😉 I hope you don't mind if I use that.

YLTN @ Work
Guest
YLTN @ Work
@gordholio: $450/month is nothing, my old townhouse was drawing $685/month in strata fees 3 years ago. I was on council and we felt the strata rates were too low to allow for buildup of any contingency fund and to maintain the "luxury amenities" that Concord put in the complex (a theatre nobody used, pool etc.). We kept trying to put through increases but these were voted down by the majority vote holder from Prompton Real Estate (Concord) who was representing a large number of offshore owners (flippers) whose units were empty. After both the primary and backup pool heaters had broken, we finally got the Prompton representative to cave-in as those owners that actually lived in their units were ready to lynch the guy as he was single handedly making the pool they had to pay for unusable (no heat).… Read more »
YLTN @ Work
Guest
YLTN @ Work
@pricedoutfornow: I was talking to a colleague about my views of Vancouver's impending crash but had to stop as I didn't realize that her husband is in construction and a crash would really hurt their income. It was the look of total fear on her face when I listed the facts that made me stop and ask why she looked so dour. It is a wierd feeling nowadays when I talk doom and gloom wrt real estate as I feel that it is starting to get through and my facts make people uncomfortable. When this happens I try and think something that will make the person feel better such as "well you bought years ago, you'll be ok". I just wish that all those caught up in the rush to the top had taken the same tact when berating me… Read more »
specialfx3000
Member
specialfx3000

@pricedoutfornow:

"I, however, have stopped trying to convince people in Vancouver that real estate is overvalued. What’s the point? It’s not worth my effort. I find it’s much more satisfying to agree with them-they have no idea I’m being sarcastic. When they say things like “Real estate only goes up” and “Vancouver is the best place on earth!” I smile and nod “Absolutely!!” I say, all the while, laughing inside “Fools” I think."

Exactly my thoughts. Last evening, I was in a real estate conversation with my wife's family and I should win an Academy Award for my acting skills. (Lot's of nodding and smiling)

registered
Member
registered

11 YLTN @ Work Says: "…these were voted down by the majority vote holder from Prompton Real Estate (Concord) who was representing a large number of offshore owners (flippers)…"

WTF? Prompton represented the majority of the votes actually showing up at a strata meeting, or of the units at this complex? If the latter this is going to be a bigger market rout than even I could have guessed.

jesse
Member

@YLTN @ Work: "but these were voted down by the majority vote holder from Prompton Real Estate"

I've seen this too, on a complex close to Lougheed Mall. The strata was controlled by majority owners who refused to spend any money on replacement reserves or preventative maintenance. For owner-occupiers and tenants this was extremely frustrating. This was 10 years ago.

Devore
Member
Devore

@YLTN @ Work: I'm entirely of the opinion that strata fees, even in Toronto where they're downright stratospheric compared to Vancouver, are too low and will see owners facing significant multiple special assessments down the road. If owning a house is a black hole of expenses, so is owning a condo, except you have no control over the expenses. They come when they come, and you don't have the option of patching things up with duct tape for a year while you save up the money.

Devore
Member
Devore

@fixie guy: Only the votes that physically show up, plus the proxy votes (which I assume default to the manager/Concord) count. There will always be some occupiers that don't want to spend any money, and then it doesn't take too many absentee investors proxy voting in a block to put a halt on any increases. Eventually, the people who live there can't put up with the problems going unfixed; they've paid big money to live there, they don't want a pool that doesn't work, or an elevator that's always out of service. I don't think there is much recourse in such cases, if the manager or developer has the majority of votes.

Anonymous
Guest
Anonymous

That's why it sucks to be an owner living in a condo complex where the majority of votes are controlled by the developer and/or absentee owners. Paying a high price to buy a nice place and no say in upkeep

YLTN @ Work
Guest
YLTN @ Work
@fixie guy: Sorry, to clarify, the majority of foreign owners were represented by Prompton. The problem was that only owner occupiers (and Prompton) showed up at the AGM so Prompton had enough votes by proxy to veto any resolution. We had to communicate to all owners what was happening to encourage them to come out and vote at a special meeting – it wasn't until the heater broke that people realized the building was going to fall apart. On a similar matter, we were voting to secure counsel for legal action against Concord and man did that make the guy from Prompton squirm. He initially rejected the proposal until we called him out on the conflict after which point he abstained. We never did go to court with Concord, they settled. To fix the original defects we had quoted $500K,… Read more »
YLTN @ Work
Guest
YLTN @ Work

Some excellent Asian business morality at play here:

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

The SEC has forced executives at Sino-Forest to resign; I don't know if the SEC has ever pulled something like this before have they? Sino-Forest = DONE!

registered
Member
registered

@19 YLTN @ Work: If I want more of that kind of action I'll stick around after work! Thanks for the insights.

jesse
Member

% of valid votes voting Yes 54.73%

% of valid votes voting No 45.27%

N
Guest
N

You guys are making some strong arguments for never, ever buying a condo, and certainly not one with lots of common amenities.

Laibach
Guest
Laibach

@YLTN @ Work:

Off the topic but while you mentioned Asian Business morality does anybody know what happened to that Realtor-Master-Lady that used to have a illegally imported slave here in Vancouver?

http://www.vancouversun.com/news/East+Vancouver+c

specialfx3000
Member
specialfx3000

@jesse:

"% of valid votes voting Yes 54.73%"

Currently doing the happy dance.

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