Friday Free-for-all!

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

British Columbians think prices are unreasonable and a good investment
British Columbians less likely to ever be mortgage free
Vancouver market coming off of boil
Prices in BC, more drops that increases
Time to limit foreign buying in Vancouver?
Plans for rental housing fall short
Full size virtual tour
Your grocery bill will keep rising
US foreclosure crisis about half over
Average American now must work two years beyond death

So what are you seeing out there? Post your news links, thoughts and anecdotes here and see if you can do it without mentioning China. I dare you.

Have an excellent weekend!

Sort by:   newest | oldest | most voted
logic
Guest
logic

"British Columbians think prices unreasonable but real estate still a good investment"

So, most of the public is rather dim.

I knew that already, but thanks for the pretty survey.

patriotz
Member

@logic:

"real estate still a good investment”

From the Idiot Dictionary: "good investment" – something I think is going to go up. Just because.

patriotz
Member

"B.C. also leads the country with the longest amortizations, with 42 per cent having more than 21 years left to pay, compared to 37 per cent."

That's incredibly high, when you consider that's for ALL outstanding mortgages. Remember not that long ago no amortization was over 25 years from the word go.

It means that BC is most vulnerable to an increase in interest rates. It also means that BC will see the most upside down mortgages if price fall. Neither of which comes as any surprise.

rob
Guest
rob

In the Toronto Star today: Ireland's home up to 75% off peak prices… in three years! http://www.thestar.com/business/article/1088877–

Better pictures in the paper edition than online 🙁

patriotz
Member

@rob:

But what would they rent for? The article doesn't say.

Just because a property is 50% off (or whatever) off peak doesn't mean it's a good buy.

Many Franks
Guest

On the CBC this morning there was a brief mention about a Landcor study commissioned by the CMHC on foreign condo ownership. From memory: they looked at the addresses that assessment records were being mailed to (e.g. is it the condo itself? Another local address? Elsewhere in Canada? Overseas?) and found that a very low percentage was being sent overseas. They weren't sure about 6% or so of them — maybe going through holding companies and the like. Their conclusion seemed to be that foreign ownership wasn't as big a contributor to the market as people broadly expect.

I know someone did some similar number-crunching months ago, but this sounded like a newly released study. I can't find anything online about it, though… Anyone catch more details or find a link?

Anonymous
Guest
Anonymous

This is what a deflated housing bubble looks like (in SPAIN)

http://business.financialpost.com/2011/11/18/this

whydoItry
Guest
whydoItry

First you extend your mortgage out to the maximum amortization and then you stop making mortgage payments altogether, then you declare bankruptcy and then your home is foreclosed.

Welcome to BC, where we have the longest mortgages in the country, and soon the highest bankruptcies and foreclosures.

I owe, I owe its off to work I go.

Dave
Member

@Many Franks:

Everybody knows that number is under reported, by a long stretch. Of course, foreign buyers don't have things mailed to them overseas. The reason they buy in Canada to begin with is that they have some type of connection here. Those connections are the people who manage their property. The exception to the above would be Americans and Europeans.

Dave
Member
@patriotz: Be careful what you assume. A lot of wealthy people still keep a mortgage on their primary residence, despite having the assets to remove said mortgage. With low interest rates, it's just cheap and easily accessible capital for them. I think it also reflects the nature of small businesses in BC. Similar to the above, a lot of businesses have chosen to finance themselves via personal mortgages. Why? Same as above. It's cheap and easy money to get. It's much harder to get a business loan. Why go with longer terms? Again, still cheap money, but it provides favourable cash flow. As you may know, BC leads Canada I believe in small businesses per capita. The banks actually do the math and calculate what percentage of people would go under with certain changes to interest rates. I have seen… Read more »
Many Franks
Guest

@Dave: That's why I was hoping to find details on the Landcor study. This other discussion — http://vancouver.openfile.ca/vancouver/file/2011/… — looks to be prone to that kind of bias but Landcor may have tried to go further.

patriotz
Member

@Dave:

"a lot of businesses have chosen to finance themselves via personal mortgages. Why? Same as above. It’s cheap and easy money to get. It’s much harder to get a business loan."

So you're saying a lot of small businesses are being financed by mortgaging RE because they would have a hard time getting financing on the merits of the business?

Well that's reassuring.

Troll
Guest
Troll

@DEFAULT NAME:

This is what a deflated housing bubble looks like (in SPAIN)

http://business.financialpost……ooks-like/

Want lower prices? Build more homes. Worked for the Spanish. Is this your vision of Vancouver Dave?

Many Franks
Guest

Heard the news segment again, still can't find a link. To correct my earlier comment:

Of condo assessments that were not sent to the condo in question, 75% went to addresses in BC. Most of the rest went elsewhere in Canada; 3% to the US; 2% to other countries. 6% were unclear, as they went to property managers, realtors, lawyers, and other people who were obviously administrating properties for someone else.

Not clear how they differentiated people administrating properties for others from assessments sent to other addresses e.g. in BC. They also didn't mention what fraction of the total number of condos had assessments directly sent to the condo's address.

I assume the study will show up somewhere sooner or later…

jesse
Member

@Many Franks: The only thing I'd state here is that I know several owners who have their assessment sent to a relative's address. In one case they declare that as their residence even though they reside out of the country for all but a few weeks of the year.

It may be difficult to get a handle on the exact number, but we can do a good job at cross-referencing assessment mailouts to tax records. This can be done with a reasonable sample size and give us decent confidence intervals on the magnitude of the problem.

The Landcor/CMHC data give a lower bound on the amount of foreign ownership. It is definitely higher than this but unclear by how much. Defining "foreign" involves many shades of grey.

Best place on meth
Member
Active Member
Best place on meth

@Dave:

>>>As you may know, BC leads Canada I believe in small businesses per capita.<<<

Is that still the case Dave, because the more vacant storefronts I see the more I wonder.

SunBlaster
Guest
SunBlaster

You missed the positive point, just because you think price is unreasonable doesn't make it a good investment. Brainwashing at it's finest.

Burbs Boy
Guest
Burbs Boy
Dave – zero chance of rise in rates a few years out? If you had said one, maybe 2 years, I think you might have many here agreeing with you… but more years than that with a zero percent chance? So much can happen in 3 or 4 years (Arab Spring? USA market crash, Euro Disaster, Oil at previous highs… I don't think any of those things were on the radar four years out; at the time). That is why it is important to be prudent and manage your risk carefully…no one knows for sure what is coming up. Hell, it seems these days no one can even make a reasonable prediction on something in the next year (like the possible collapse of the Euro). So perhaps that prudence might include seeing how the family finances handle 1, 2, 3,… Read more »
Manson
Guest
Manson

Many areas in Vancouver that used to be undesirable are now wonderful diverse neighborhoods..Up around Main and 28th is a great location now and if you think prices will crash in these areas you have rocks in your head..too many people with money that would love to get in there if prices come off even a bit.Canada is not America boneheads and even Seattle has nothing on Vancouver.

whydoItry
Guest
whydoItry

Is that:

American boneheads?

or

Canadian meatheads?

jesse
Member

@Manson: "too many people with money"

If by "money" you mean "equity"… Okay… LOL

Re-diculous
Member
Re-diculous

Here's 5 reasons why it's better to rent than own from Rob Carrick (who most often makes alot of sense)….
http://www.milliondollarjourney.com/5-reasons-it%

patriotz
Member

@Re-diculous:

But he doesn't come out and give the reason that really matters:

BECAUSE IT'S CHEAPER.

Oilman
Guest
Oilman

@Manson: 'Seattle has nothing on Vancouver'

Really? How about: 1)Better Jobs 2)Much better GDP/capita 3)Cheaper housing 4)Identical weather, but closer and cheaper to get to better weather (Hawaii, California, Mexico, etc.) 5)Microsoft 6)Better highways and access to the city 7)Better Arts and Culture 8)Great skiing/boarding without the Whistler goofs…

JRoss
Guest
JRoss

BPOM

"As you may know, BC leads Canada I believe in small businesses per capita"

We have more people who need fronts to launder grow-op profits

wpDiscuz