Friday Free-for-all!

It’s the end of another week, time for a long weekend and then it’s back to school and back to work. Let’s do our regular end of the week news roundup and open topic discussion thread! Here are a few links to kick off the chat:

We’re NUMBER THREE!!
Does ‘liveable’ mean ‘unaffordable’?
Home prices US vs Canada
Bubble, Bubble, There’s a Bubble.
BC Conservatives propose phasing out PTT
Housing industry waiting for HST plan B
CIC launches consultation on immigration mix
Canada.. the incredible shrinking economy?
Court ordered sales at the high end
Canadians can’t save an extra $25 a week?
More in BC carrying debt into retirement
32% of Canadians counting on Lotto win for retirement
The two-tier US housing market

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

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Frank
Guest
Frank

@patriotz:

The only thing that is self-evident is that we cannot afford the very lavish benefits, mostly aimed at seniors that we boomers have set up for ourselves, and expect the next generation to pay for .

My statement about deferring income taxes was partly tongue in cheek. However when you calculate healthcare, nursing home, drug costs, pensions and now this – the costs are enormous.

Here's an interesting one- a buddy who owns an expensive second home on the Island, tries to travel there on week-days as seniors travel free on ferries on week-days. Blanket exemptions for any group are not fair in my humble opinion.

Enjoy the long week-end.

patriotz
Member

@Frank:

Why not let young people defer their income taxes while their families are growing and they need the money for necessities.

The answer is self-evident, they don't have collateral. Plus the amount of money involved would be massive compared to the seniors property tax deferral. There is no way that the bond markets would let the fed & prov governments borrow the money.

Plus it's stupid to let younger people defer any taxes for reasons that should also be self-evident.

patriotz
Member

@bubba:

Yes indeed there is new housing being built in Arizona and Vegas too, because there is still a market for people who "just have to" buy new.

And prices are down over 50% from peak. Remember that next time someone like Dave tells you that new construction will stop when prices fall. Your homework assignment is to figure out how builders down south are making a profit at today's prices.

Frank
Guest
Frank
@jesse: Sure Jesse, I know it is deferred. But if you can defer from age 65 until you die at 85 or 90, that's 20-25 years, that's like not paying! Why should only this type of tax be treated in this way. Why not let young people defer their income taxes while their families are growing and they need the money for necessities. Listen I am an old fart, so I can say it. Their are too many rules in our fine country which discriminate against young people. Many older folks have enough money to pay for lots of things from healthcare to drugs to taxes, and if they don't maybe they should have saved more and drunk and smoked less, but the laws assume everyone gets to old age destitute. And if you are a wealthy HAM who is… Read more »
bubba
Guest
bubba

Anecdote….. amongst many from my trip.

While in Alberta, had dinner one night with some family.

Spouse's cousin is a realtor woh lives North of Edmonton.

She and her spouse (both in mid 50's)were talking about their NEW house in Arizona….THAT WAS BEING BUILT….CUSTOM …nearing completion !

I just about fell off my chair…as I thought WTF ?

I mean, isn't there great selection…of used…going begging?

bubba
Guest
bubba
@Space889: A lot of the potential new zonings are based on coach houses. What will happen is that (2) neighbourhoods planned for this will turn into crowded slums. IMHO No need for coach housing, it's simply builders lobbying for a niche'market . Its better to build a suite if its a revenue issue. Coach/laneway housing will negatively impact neighbourhoods. Also, if not mistaken Section 18 of the Assessment Act protects owners re higher assessments if they have lived on the property for 10 consecutive years. See how this may play out re: coach houses. Many people do NOT want blockbusting, and want to remain in their neighbourhoods.. so one shouldn't tar them all. Many areas of Richmond are organizing and stopping these spot re-zonings. The only downside is this affects small Ma and Pa builders….the big boys have lots of… Read more »
jesse
Member
@Frank: There are a few things to remember with this property tax scheme: 1) It is a deferment. All taxes must be paid when the property is sold or transferred. It's a loan from the provincial government and the City gets its pound of flesh. 2) There is some interest charged on the loan and an application fee. For seniors this rate is quite low but still a penalty. 3) The owner must have a certain amount of equity in the property. If they have a high leverage ratio they cannot defer. The issue I have is that it promotes "hoarding". Regardless of the owner's situation, if the owner cannot service the taxes, that indicates in a way they are not able to have the land contribute to the community. In my view property taxes are a way of reminding… Read more »
Frank
Guest
Frank

@Anonymouse:

I completely disagree.

Based on that premise a wealthy HAM or retiree from out east who 'shows' very little income who bought their home for cash would have their taxes deferred for perhaps 20 years, while a young couple struggling to make ends meet would be paying through the nose.

Wrong-headed.

Anonymouse
Guest
Anonymouse

@Frank:

The value of the house should be irrelevant. Perhaps the one person you know about who claims this actually has a pretty low income?

Frank
Guest
Frank

@patriotz:

Thanks Patriotz

Well it is 100% wrong. there is no reason why someone should forgo, even if it will be paid eventually, their taxes.

Wish I could that with my income tax.

The seniors I know in West Van are very wealthy, and don't need this hand-out. The one disabled guy I know who told me he pulled this off is in pretty good shape (it seems he got it for psychological reasons ) and lives in a $2.5 Million house with a low mortgage.

We are just subsidizing the rich with these hare-brained schemes.

Just Looking...
Guest
Just Looking...

@Frank

Presumably, the law of averages would make policies like the one in W. Vancouver a zero-sum, or close to it. The number of people leaving the program in a given yr. vs the number of people entering it would, on average, balance. One could structure into it an inflation rate on deferred taxes so that the city was not holding the bag on inflation.

Even if the market crashed 50%, even 20 yrs of property taxes would be dwarfed by the sale prices and the city would be ahead of all other creditors. Sure, it's a $2m house now, but it wasn't when these buyers would have purchased (for the most part).

YLTNboomerang
Member
@Best place on meth: It's interesting to watch where prices are dropping. I've been tracking townhouses in Downtown/Coal Harbour/Yaletown and Houses in North Van around Delbrook/Capilano Highlands for 4 years now. The townhouses are clearly declining in price with a number of units listed below what they were last purchases for. The newer buildings that are fresh on the market for a flip are never priced correctly as the owners are using cost plus pricing to make a profit – they don't realize that they will have to take a loss to sell today. These "newer units" tend to slowly reduce prices but ultimately it looks as though the market price is falling faster than list prices. Anyway, the downward phenom has only really set in the past two months. Looking over in North Van, there was a downward trend… Read more »
patriotz
Member

@Frank:

It's a provincial (not WV) program. Basically the province lends seniors money to pay their property taxes and the balance compounds at the same rate the province pays to borrow money.

So in accounting terms it's not a handout and it affects neither the income account nor balance sheet of the province.

Given today's very low interest rates and low property tax rates, it's highly unlikely any property would see negative equity when the owner dies or sells.

It does distort the housing market because it keeps people in houses past the point where they would otherwise sell. But the sale happens eventually, so it really delays rather than reduces supply.

What really bothers me is the similar program the province recently introduced for families.

Anonymouse
Guest
Anonymouse

@Frank:

That'd have to be a pretty big crash for the sale price to not cover back property taxes.

Frank
Guest
Frank

I just found out that in some Jurisdictions, eg West Vancouver- the City allows those with disabilities or over 65 to defer property taxes until they sell the property or die.

Does that mean that the tax burden is borne even more by the young workers or does the city borrow against that future income, hoping one day it will get in – ie there is not some property crash?

To my way of thinking if you live in a $2 M house, whatever your status, you should be able to carry your own burden (since you are most likely to be using the services as well). Or get a reverse mortgage, or sell and move down!

Space889
Guest
Space889

@bubba: Well as. Patriotz always said, homeowners should be happy that their homes are now taxed at best and highest use, gives them a free jackpot to sell at premium price and buy nearby at lower price and pocket the gain. You should be happy developers are doing this!

Best place on meth
Member
Best place on meth
Today Las Vegas real estate prices are down 59%, but 5 years ago as the bubble was peaking they were using familiar arguments for skyrocketing prices and even predicted that they would keep rising. "Everybody wants to come here" and yes, even "lack of land" http://www.macrobusiness.com.au/2011/09/how-las-v… An article published in late 2006 in USA Today explains the supply situation in Las Vegas nicely: LAS VEGAS — Flying into this desert metropolis is as deceiving as a mirage. From 10,000 feet you see empty land in all directions and swear the pace of suburban sprawl could go on unchecked. You’d swear no end’s in sight to subdivisions stretching for miles beyond the Strip, enclaves of single-family houses that draw thousands of Californians and other migrants a year. Look again. The valley that Las Vegas and 1.8 million residents call home is… Read more »
registered
Member
registered

84 Keeping An Eye On The Pimps Says: "It’s just like Vancouver, but with even more rich chinese."

Not even close. Beijing is home to a global manufacturing dynamo unseen in history, in a country emerging from decades of 100% state controlled economic mismanagement. Vancouver isn't. Only one has solid economic fundamentals nearby.

Keeping An Eye On Th
Guest
Keeping An Eye On Th

"Rampant real estate development and speculation have led to the building of entire “ghost cities” that are nearly, if not completely, vacant. As many as 64 million Chinese apartments are vacant, according to some estimates.

Feverish speculation has led nationwide housing prices to rise an estimated 140 percent since 2007. Housing prices in Beijing have risen as much as 800 percent in the past eight years."

http://www.gobankingrates.com/mortgage-rates/chin

It's just like Vancouver, but with even more rich chinese.

64 million empty apartments, yet prices have risen as much as 800 %.

Doesn't anybody, except about a dozen on VCI, see a problem?

Anonymous
Guest
Anonymous

do you have a problem with RE being one of the topic? You must be a sour renter!

vreaa
Member

A City Obsessed – "I can’t remember the last time I went out with friends and real estate didn’t come up. Don’t we have anything else to talk about?"

http://wp.me/pcq1o-2Sn

Best place on meth
Member
Best place on meth

More highlights from the August report with respect to HPI benchmark prices.

Van East SFH, -3.5% (+19.6% yoy)

Van West SFH: -4.0% (+13.1% yoy)

Burnaby SFH: -1.3% (+13.2% yoy)

Coquit. SFH: -2.7% (+6.5% yoy)

New West SFH: -0.9% (+9.1% yoy)

Richmond SFH: +3.5% (+22.4% yoy)

N. Van SFH: +3.2% (+10.3% yoy)

W. Van SFH: +1.8% (+26.6% yoy)

All property types in all areas are +8.5% yoy.

bubba
Guest
bubba
@4SlicesofCheese: Richmond City Hall is crooked-er than a dogs -hind -leg As a 50 + year Richmond citizen, what is happening is developers are rolling the dice in SF zonings areas on "arterial routes" and effectively making application for amendments to current zonings. I have duly noted that if a developer is " patient and persistent", they often win. Example: Williams Road, from #5 RD to # 3 RD , since approx. 2000, has effectively allowed 66 ft. lots to be subdivided into (2) 33 ft lots for SFH. However, near Garden City and Williams, a 8 – 10 unit condo complex now exists, approx. 2-3 years after (2) SF homes were demolished. Currently, the City of Richmond is looking at "coach house" areas, which effectively could impact 250 + SFH properties Why? Simply "lobbying"by developers meets "tax grab" ..same… Read more »
bubba
Guest
bubba

OK VCI folks

Back from a looooooonngggg (2) week trip.

Lower Mainland….to Shuswap…to Calgary…..to Edmonton….to WhiteCourt….Jasper..down Yellowhead Hwy…to Kamloops…to Lower Mainland.

Much to report re: Real Estate in aforementioned areas.

patriotz
Member

@Wake Up:

Should we also assume the only people who commit suicide are hockey players? Those are the only suicides that have been reported by the media

No, celebrity suicides in general get reported because, well, they're celebrities.

Wealthy or otherwise prominent people who get caught breaking the law often end up in the media because it's considered newsworthy. For example, take Conrad Black, and also his son who was in trouble a year or two back for a driving offense and more recently for harassing an ex-girlfriend. And those guys are white of course. Not to mention a certain premier who got his mug shot all over the media about 10 years ago.