Friday Free-for-all!

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

Prediction: The Canadian Housing Market will Crash
Household borrowing surge driven by most indebted
Boomers ‘punch drunk’ on debt
Canadian home prices fall for first time since fall, 2010
-Either Windsor or Edmonton has the most affordable market
Canadas job market in bad shape
Property taxes on the rise
$100 hot dog, get it while it’s hot.
US banks face margin pressure from fed rates
US new home sales worst ever in fall 2011
A real estate downturn down under?

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

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VMD
Member
4 years 18 days ago

Just started a thread in the forum to help RE newbies (myself included) understand the linguistic intricacies in a typical MLS listing (especially for Vancouver). To start off:

“Handyman’s Special”: looks bad, smells bad, has at least one major system that doesn’t function

“Motivated”: seller gives the impression that he is under pressure to reach a quick deal

perhaps someone can continue on by defining “Vancouver’s Special”, etc.

feel free to add to an entry that was already defined :)

http://vancouvercondo.info/forum/topic/mls-lingo-

VMD
Member
4 years 18 days ago

Current result from 2 polls, FWIW

1. "Will the housing market finally crash?" (from the first link)

Yes: 201 (78.5%)

No: 55 (21.5%)

2. "Is Greater Vancouver RE in a bubble?" (from Westca Chinese forum, poll started 1/26 @ 5pm)

Yes, big bubble, bursting soon: 16%

Yes, moderate bubble, not bursting in near future: 45%

Yes, just a small bubble: 11%

No, price is reasonable: 15%

Not at all, price will continue to increase: 11%

<a href="http://translate.google.com/translate?sl=auto&tl=en&js=n&prev=_t&hl=en&ie=UTF-8&layout=2&eotf=1&u=http%3A%2F%2 Fwww.westca.com%2FForums%2Fviewtopic%2Ft%3D423182%2Flang%3Dschinese.html&act=url” target=”_blank”>http://translate.google.com/translate?sl=auto&amp…” target=”_blank”>Fwww.westca.com%2FForums%2Fviewtopic%2Ft%3D423182%2Flang%3Dschinese.html&act=url

Guest
rp1
4 years 17 days ago
Member
CanuckDownUnder
4 years 17 days ago

Downturn down under? Please, house prices are set to soar: "For most of this year Australians have had to read asinine media articles reporting purported experts predicting catastrophically large 20 per cent, 40 per cent and, last week, 60 per cent falls in domestic house prices." http://www.businessspectator.com.au/bs.nsf/Articl… Forget the fact that the Australian economy lost 30,000 jobs in December. Who cares that the country actually lost jobs in 2011, the first time that this has happened since 1992? Retail had an absolutely awful Christmas season and there are going to massive blue collar and white collar job cuts this year.… Read more »

patriotz
Member
4 years 17 days ago

http://www.nytimes.com/2012/01/26/greathomesandde… I found these parts interesting: The property market was unaffected by the global financial crisis, mainly because the conservative lending approach of German banks did not create a housing bubble, said Peter Talkenberger, the founder of AllGrund Ltd., a brokerage in Frankfurt-Dreieich… Foreign investors began buying in Frankfurt in growing numbers in the early 2000s and have continued to do so, Mr. Talkenberger said. Many early buyers were British, Irish, Japanese and Australian; today the preponderance are residents of south European countries, the Middle East and China. As for Wiesbaden, it sees many American and Middle Eastern buyers… So… Read more »

Guest
Boombust
4 years 17 days ago

A "Vancouver Special" is one of those gently-pitched tar and gravel roofed, plain vanilla boxy type houses, usually of white stucco and brown wooden trim, built maostly during the 1960's-70's. Sometimes the front facades were dressed up with faux stone, wooden siding and brick. The really adventurous added to the delight with cheap cement statuary and wrought iron (now aluminum)fencing for the front yard. The houses often came with a "suite-able" basement AND a balcony for the sliding glass doors at the front living room of the house. No one ever sat out on them, though. They were mostly for… Read more »

Guest
duh!
4 years 17 days ago

$100 hot dog is just a stupid advertising gimmick. please stop helping him promote himself, he isn't giving anyone any value.

Guest
terminalcitygirl
4 years 17 days ago

First Time Buyer: someone with little knowledge of the real estate industry, it's players and (lack of) ethical conduct; someone inexperienced in buying real estate. A member of a socially vulnerable group including new immigrants or young people. A mark. A sucker.

Guest
Tony
4 years 17 days ago

@VMD, what is an executive house? Seriously.

Member
space889
4 years 17 days ago

@VMD: Maybe move on to Vansky.com. I think that's bigger than westca, at least by the number of people posting ads on their BB. I never visited their forums myself….Chinese skills not up to par anymore.

Guest
condo conundrum
4 years 17 days ago

Here is a prime example of greed and disconnect.

I know someone who lives in the building.

Both suites are almost identical, one has lipstick the other not

http://tinyurl.com/829yrmf http://tinyurl.com/7r8tsc5

M-
Member
4 years 17 days ago

RE: Vancouver Specials: see also vancouverspecial.com

Guest
Dante
4 years 17 days ago

Shooting in Vancouver

Man shot in the leg, not cooperating with police

http://www.news1130.com/news/local/article/324369

If you walk in Vancouver use the zig-zag and roll method so you can avoid the bullets.

Guest
WS
4 years 17 days ago

Any ideas for shorting the impending Vancouver real estate crash?

I am unsure of the banks, they seem sheltered with most of the risk with the CMHC holding the bag. But they still should get hit with consumer credit, underwriting etc.

Any public construction companies in Canada focused heavily on residential construction Vancouver or Toronto?

Any public furniture companies?

Other ideas? And don't say REITs.

Guest
Vansanity
4 years 17 days ago

Young Families Pull Up Stakes For Better Life

http://www.theprovince.com/business/Young+familie

I didn't have time to search if anyone put this up. My wife and I can relate to many of these stories and we too will be moving by mid 2013 if the stars don't align.

Guest
fixie guy
4 years 17 days ago

@14 WS: Austin on RET set up a fund (?) to short Genworth Financial Canada back in the 2008 glory daze but he's (?) been quiet on that front for a while.

Guest
Bailing in BC
4 years 17 days ago

@Dante:

When I read that headline I thought "Crap! The police are shooting people now for being uncooperative?"

Guest
chip
4 years 17 days ago

@Vansanity:

The Vancouver bubble isn't the only reason, or the main one, but it is a significant reason why we have opted to move to Bali for a year. We would like to purchase again in Vancouver but since we can run our businesses remotely, and we are not keen to lose several hundred thousand on real estate in the next few years, we've decided on a little holiday until things return to normal.

Makaya
Member
Makaya
4 years 17 days ago

@condo conundrum: There is a 6 sq.ft. difference between the two places. That's $148,000 more if you want the additional space, or $24K per sq.ft.

Or maybe this has to do with the fact that the more expensive one is more recent. Apparently, it was built in 1996, when the cheaper one was built in 1995 :)

lol…

Member
Best place on meth
4 years 17 days ago

@chip:

You lucky dog, I wish I could do what you're doing.

You're going to love Bali, it actually could qualify as the best place on earth.

Awesome people, amazing scenery, beautiful houses, perfect weather, world class diving….just watch out for the monkeys, they're troublemakers.

Guest
Anonymous
4 years 17 days ago

"Awesome people, amazing scenery, beautiful houses, perfect weather, world class diving….just watch out for the monkeys, they’re troublemakers."

Cheap houses too. It is a wonder what terrorism and world wide travel advisories can do to real estate prices.

Member
victoria
4 years 17 days ago

MSM media is sure changing its tune.

http://www2.macleans.ca/2012/01/26/what-happens-w

Wow!

Also good luck Chip. You are lucky. I love monkey's btw.

Member
Best place on meth
4 years 17 days ago

@DEFAULT NAME:

>>>It is a wonder what terrorism and world wide travel advisories can do to real estate prices.<<<

Spoken like a true Vancouver cheerleader who's travel experiences have been limited to Bellis Fair and Disneyland.

You poor baby, are you afraid of terrorists everytime you leave Gangcouver?

Better stay away from the US and Europe too then, ok?

Guest
Yalie
4 years 17 days ago

Any ideas for shorting the impending Vancouver real estate crash?

Debt collection agencies are the lowest of the low, but they do well in tough economic times:

http://www.businessweek.com/investor/content/apr2

patriotz
Member
4 years 17 days ago

@Makaya:

Or you can rent a similar place in the same hood for $2100/month:

http://vancouver.en.craigslist.ca/van/apa/2774124

As an investment those condos are only worth about $200K. Remember it's leasehold and the last owner has to give it back.

Guest
WS
4 years 17 days ago

@ fixie guy

Perfect. Thanks. Genworth is the type of ideas worth researching further.

Makaya
Member
Makaya
4 years 17 days ago

@patriotz: from the ad:

"$2,100/m including gas OBO. One year lease. Moving in anytime."

It looks like the place has been for rent for quite a long time now… The $2100 rent is overpriced. You can get much better than that for that price, or similar condos for much cheaper. Poor investment indeed!

jesse
Member
4 years 17 days ago

Canadian agencies wary of calls for overseas buyer curbs Canadian overseas property agencies are monitoring growing calls for protectionism, worried that booming international sales markets in cities like Vancouver could be affected if local campaigners get their way and the government imposes purchase restrictions on buyers from abroad. Speaking exclusively to OPP this week, Nicola Way, owner of agency Best Homes BC, said “there are definitely suggestions in the media that Canada should implement the same sorts of restrictions that Australia has when it comes to overseas buyers.” However, she adds, “the fact is that there is no definitive data… Read more »

Member
Best place on meth
4 years 17 days ago

@jesse:

>>>almost everyone is assuming that overseas demand is limitless<<<

No mention of Vancouver here.

http://www.propertywire.com/news/europe/global-ci

VMD
Member
4 years 17 days ago

@rp1:

Thanks, that's an interesting list of definitions!

@Tony

Vansky's forum seems to be an unorganized message board full of random posts.. gives me a headache just to look at it..

My main thread at Westca forum already has over 26k view count, I'm content with that.. for now : )

Guest
Anonymous
4 years 17 days ago

@Best place on meth: "You poor baby, are you afraid of terrorists everytime you leave Gangcouver? Better stay away from the US and Europe too then, ok?" Relax buddy. Terrorism has been a problem in Bali and has impacted everything from the price of a hotel to buying a place. It went from cheap to dirt cheap. I got no problem with it. Just pointing it out. Speaking of getting outside of Vancouver I am not the guy who spends his days, evenings and weekends on this forum. Ever been outside of your basement suite little lone Vancouver?

Makaya
Member
Makaya
4 years 17 days ago

@jesse: From your article: "it is not easy to get independent and objective figures on the volume of residential property going to overseas buyers in Canada, but Benjamin Tal of the Canadian Imperial Bank of Commerce (CIBC) Benjamin Tal has put out figures suggesting that Chinese investors are now buying condominiums and houses worth more than $2 million at unprecedented rates in the more upmarket areas of Vancouver. Chinese buyers now account for approximately 20% of overall sales in the city, he says, and is the main the reason prices are so high there. "If you eliminate this segment, you… Read more »

patriotz
Member
4 years 17 days ago

@Makaya:

"- interest rates locked for the duration of the mortgage (no more reset every 5 years and no more variable rates)"

How? Decreed by the government? Would the government decree the rates too?

Just get the government out of the mortgage market.

Makaya
Member
Makaya
4 years 17 days ago

@patriotz: "How? Decreed by the government? Would the government decree the rates too?"

Well, the same way it works in most of Europe (in France, for example, you can get a mortgage for 25 years with a fixed rate and the government has nothing to do with it). Banks can do it, the government would not be more involved than when they require a minimum of 10% or more downpayment.

Guest
YLTN @ Work
4 years 17 days ago

Ha, the globe and mail changed their headline:

Was: "Boomers punch drunk on household debt"

Now is: "Older consumers pile on new debt"

They left the URL the same though so you can still capture the punch-drunk / kool-aid headline

patriotz
Member
4 years 17 days ago

@Makaya:

You seem to have missed my point. Anyone lender in Canada can make a mortgage loan with the interest rate locked in for any duration right now.

Why should lenders HAVE TO lock in rates for the whole duration of the mortgage?

Guest
Anonymous
4 years 17 days ago

hey,

go look for work. dont stay home and make your wife work. what the matter? cant find work in ottawa?

Guest
Some Guy
4 years 17 days ago

Is it just me, or does this editorial in the Globe and Mail lauding the virtues of debt servitude sound reminiscent of people who have just gotten in too deep on a house purchase and then come to comment threads trying to rationalize their mistake:

Globe editorial board is drinking something stronger than punch

Makaya
Member
Makaya
4 years 17 days ago

@patriotz: Sorry, I didn't get your point. The reason is for certainty and stability, to avoid exactly what happened with the subprime mortgages. A lot of the problems in Canada will occur when interest rates rise and mortgages reset. Lots of people that could service their mortgage at the initial rate will no longer be able to do so with a higher rate, maybe will be forced to sell (which will make the burst even worse) and some of them will be forced into bankruptcy. You may point out the irresponsibility of the buyer and you would be right, but… Read more »

patriotz
Member
4 years 17 days ago

@Makaya: The issue of buyers not being able to afford increased interest rates would be taken care of by the market if the government stopped guaranteeing mortgages. Lenders would make borrowers qualify on historically normal rates rather than temporarily low rates. The other problem is that if the rate is locked in for, say, 25 years, that's an obligation by the borrower to the lender to pay those rates for 25 years which means the borrower would have to pay a penalty to prepay, refinance at a lower rates, or sell if it wasn't to the lender's benefit.

Makaya
Member
Makaya
4 years 17 days ago

@patriotz: "the borrower would have to pay a penalty to prepay" There is no such things in the country I have in mind. "refinance at a lower rates" Again, in the european country I'm thinking of, when you refinance your mortgage, you usually transfer your mortgage (and all your other accounts) to another banks and you get the lower rate without penalties. (I know because that's what my brother did) "or sell if it wasn’t to the lender’s benefit." I don't see the point here. The lender can't force you to sell as long as you're servicing your mortgage. "The… Read more »

Member
Patiently Waiting
4 years 17 days ago

A smug Boomer newspaper columnist is suddenly concerned about housing affordability. Why? "In fact, sky-high Vancouver housing prices were one of the reasons why my son, a young engineer, and his wife chose to move to Montreal, where they were able to buy a townhouse for half what they'd have to pay here. They miss Vancouver terribly, and we miss them and our little granddaughter. But we realize the vast distance separating us is the penalty we pay for living in Lotusland, and my son pays for having a real job." Read more: http://www.theprovince.com/business/need+look+gre… He's only concerned now that it… Read more »

Member
vangrl
4 years 17 days ago
Makaya
Member
Makaya
4 years 17 days ago

@Makaya:

"“the borrower would have to pay a penalty to prepay”

There is no such things in the country I have in mind."

Actually, there are some penalties if you prepay, but there are lots of rules and possibilities to get around them so in reality, only a minority would pay for them.

One of the problem in Canada is the lack of competition between the banks (same goes for mobile phone). I find the various banking fees and charges outrageous in Canada.

Guest
Anonymous
4 years 17 days ago

@Makaya: "Potentially all of them, depending on the rate offered. That’s the case of 75% of the mortgages issued in one European country I’m familiar with."

They used to do that here in the 60s. It transfers the risk of interest rates increasing from the home owner to the bank. When risk is transferred someone has to pay for it.

patriotz
Member
4 years 17 days ago

@Makaya: Me: “or sell if it wasn’t to the lender’s benefit.” "I don’t see the point here. The lender can’t force you to sell as long as you’re servicing your mortgage." That's not what I'm talking about at all. What I've already said is that if you have a locked in rate for 25 years you have an obligation to pay that rate for 25 years and if you sell your house and want to pay off the mortgage the lender is going to want a penalty from you if receiving the prepay is not to their benefit. That of… Read more »

Makaya
Member
Makaya
4 years 17 days ago

@DEFAULT NAME:

"They used to do that here in the 60s."

In the 60s, was the RE market in a bubble like today?

"It transfers the risk of interest rates increasing from the home owner to the bank. When risk is transferred someone has to pay for it."

True, let the market (and real competition between banks) decides what the true cost of that risk is. It's their job after all!

Makaya
Member
Makaya
4 years 17 days ago

@patriotz: "So if you want the government to intervene to force 25 year mortgage terms how much more intervention do you want? Because the banks would not do the things you’re talking about in your European example if the government didn’t make them." If it works in my example, why couldn't it work in Canada? My only point is to say that long term fixed mortgages is better for the average homeowners and the general economy, as it removes some potential instability that can be disruptive. When you pay back a mortgages early in that country, you have to pay… Read more »

Member
Patiently Waiting
4 years 17 days ago

Real estate insiders may like the idea of a stable market with slight decreases in prices, but I wouldn't want to be the one to tell the "average" Greater Vancouver home owner that they are about to lose $25k in equity.

People aren't buying with the idea of falling prices. Especially when costs of homeownership, like taxes and interest, are set to rise. That's why such "stable" conditions can't last. Either we are going up again or it will crash.

You can't have it both ways, BCREA.

http://www.bcrea.bc.ca/docs/economics-forecasts-a

Guest
Anonymouse
4 years 17 days ago

@Makaya:

"True fixed mortgages in Canada don’t exist here."

How so? You can get a open fixed mortgage. If you get a closed mortgage you'll get a discounted rate, on the basis that there will be penalties for early repayment.

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