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Friday Free-for-all! 11-11-11

It’s that time of the week again, lets do our news round up and open topic weekend discussion thread! Here are a few links to kick off the chat:

–650,000 Canadians couldn’t deal with small mortgage increase
–Metro Van new home prices flat in September
–BNN Video on risks in Canadian Housing
–Realtor says downsize to a condo now!
–Credit created out of thin air
–Coquitlam residents unhappy with highrise plan
–Foreign investors fuel Florida housing boom
–Gloomy outlook for China

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

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Crash

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I just want to say a quick thank-you to all the veterans who fought for our freedoms that we enjoy in this fine country we have the priveledge to live in. Thank you for your sacrifices.

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patriotz

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And to getting back to RE, the government did the right thing helping them to buy houses after the war.

How things have gotten out of hand.

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jesse

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Talking to a friend in London recently I was interested to learn his flat has price-rent of 300. Hot Russian/Arab Money or somethingorother. I don't think Vancouver is alone in having nutzoid prices.

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stagnate

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patriotz says: the government did the right thing helping them to buy houses after the war.

why would it be different than now? direct government intervention in housing is never a good thing, if prices were too high at the time they either needed to come down and/or veterans could be helped in other ways.

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real_professional

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-“…the real estate market here has cooled so rapidly this autumn that the tents have disappeared and been replaced with 20-foot-long banners on balconies with the phone numbers of speculators desperate to sell. Ads have grown on the Internet for unfinished apartments at up to 28 percent off the price at which developers were selling them a few months ago.”

-“A variety of government and other private indexes show fairly little change in the prices reported for the dwindling number of transactions still taking place. But real estate price data is notoriously difficult to collect reliably in China, and brokers in some of its largest cities say that steep declines are already taking place.”

New York Times

November 10, 2011

Government Policies Cool China’s Real Estate Boom

By KEITH BRADSHER

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rksleung

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@Jesse,

I guess it's the same in Florida, as pointed out by one of the links. That Icon building in Florida is selling not so much at depressed prices but at prices typical in Vancouver. There are even units selling at $1000/sqf.

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patriotz

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@stagnate:

"if prices were too high at the time they either needed to come down"

Prices weren't too high, they were low relative to market rents (actual rents had been controlled during WWII and shortly thereafter) because of unavailability of financing.

I don't think you appreciate how bad the housing situation was post-WWII. Very little housing had been built since 1929. You can't expect the free market to fix things when the free market basically had not functioned for over a decade.

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rksleung

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I believe the housing crash in China is overplayed at this moment. The key, the key is that the housing slowdown was actually orchestrated by the chinese central goverment. Just as the gov can orchestrate a slowdown, it can also make it back up. There are still tons of tools available from the chinese gov to prop it back up.

This is unlike the US real estate "crash", where the government did not in any instance during the "bubble" phase, tried to slow it down. In all likelihood, the housing bubble grew so large that it burst on its own.

At least the gov in china is sensible enough to slow it down.

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rksleung

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Funny. Free market did not exist anymore after 1929. Don't blame the free market for not building houses. Blame it on those interventionist policies enacted by FDR and previously Hoovers.

Who had the guts to peck the court when the judges ruled that those new deals are against individual liberties??? Who would build housing if you have rent control in the first place?

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registered

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4 stagnate Says: "why would it be different than now?"

"Why" it happened is a good question but the reality is the CMHC's mandate expanded beyond recognition. The fed wasn't soaking up lender Mortgage Backed Securities after WW2 or using a citizen assistance program to finance business ventures as is now the case. It turned to disaster because some bright bureaucratic mental case thought they could use a social support program as a profit centre.

It's now a corporate assistance program.

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stagnate

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patriotz says: I don’t think you appreciate how bad the housing situation was post-WWII. Very little housing had been built since 1929. You can’t expect the free market to fix things when the free market basically had not functioned for over a decade.

that sounds like a bit of an excuse, you can hear similar spin today. if there was a shortage of housing values and rents would have been higher. the free market was ready to roll from 1945 on regardless.

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chilled

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@stagnate:

patriotz says: the government did the right thing helping them to buy houses after the war.

"why would it be different than now?"

Because then, Canada didn't invite with open arms, those who were trying to obliterate us.

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stagnate

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fixie guy says: the CMHC’s mandate expanded beyond recognition.

that's an understatement, the cmhc's mandate is massive, mysterious, ever changing and way beyond 99% of the populations' ability to comprehend.

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"How things have gotten out of hand."

Yes, typical government intervention going wrong. The more things the government stays out of the better.

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@rksleung:

"That Icon building in Florida is selling not so much at depressed prices but at prices typical in Vancouver. There are even units selling at $1000/sqf."

It didn't take me long to find a unit in Icon asking $376 per square foot.

http://miami.craigslist.org/mdc/reb/2695269210.ht…

Icon is a 5 star building that we do see in Vancouver. The closest thing we might have would be the Fairmont Pacific Rim where asking prices range from $1218 to $3362 per square foot. We are still 3 to 4 times the price of Miami in Vancouver for condos.

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@x:

"do see in Vancouver" should be "do NOT see in Vancouver"

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victoria

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650,000 would be in trouble if rates went up. I am sure it would be many many more.

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Devore

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How many clicked on the Florida boom story just to see the date stamp?

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@jesse:

Maybe not alone, but still not at our level. My price/rent is 468 based on assessed value.

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Alum

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@stagnate:

True, government should stop interference in the housing market by the name of helping veterans.

There are more sustainable ways to help them.

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Devore

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@x: 675 sqft studio? That would easily be a 2 bed+den in a typical Vancouver condo. A-class buildings command higher prices. Asking rents $1400-1800. Price $250k, $450 condo fees, wonder how much for property tax.

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rksleung

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Looking at Miami stats surprised me. I think the city is a graveyard for real estate investors but apparently, it depends on locations again.

apartment
http://www.zillow.com/homedetails/2899-Collins-Av…

Scroll down and check the ten year trend.

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rksleung

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Now, SFH.

http://www.zillow.com/homedetails/260-W-35th-St-M…

The owner even managed to erk out a profit of 100k from 2007 to now.

Any clue?

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patriotz

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@stagnate:

"if there was a shortage of housing values and rents would have been higher."

Sale prices of housing have NOTHING TO DO with actual amount of housing versus amount of households. Could anything be more obvious from the bubble and bust of the last decade?

Market rents do. As I said, rents were controlled during the war and if they had been lifted during the severe housing shortage they would have skyrocketed.

You really ought to do a little reading about the situation post-WWII. There was even an occupation of the old Hotel Vancouver (not the current one) by veterans and their spouses. Imagine the Occupy protests multiplied by a thousand and manned by people who had just finished fighting the war, and you're getting warm.