Friday Free-for-all!

Yeah, that’s right. It’s the end of the week and that means it’s time for our regular end of the week news round-up and open topic discussion thread. Here are few recent links to kick off the chat, the first one see’s our very own Vancouver Real Estate Roller Coaster show up on the evening news:

No Bubble in Vancouver (video)
Inventory now under 10 year record
Average house prices for the last year
What housing bubble?
Vancouver drags Canadian real estate
Canadian banks not immune to bubble
Half of Canada to retire with mortgage
CMHC insurance protects the lender
‘Condo king’ says bubble talk just hot air
‘Condo king’ on BC housing commission
Does Canada have ‘Dutch Disease’?
Professional women go it alone
Instant house
Real estate crash in China underway
VCI now on Twitter

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

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Contrarian Lemming
Guest
Contrarian Lemming

“I believe should void any contract with CMHC.”

“the buyers lawyers…never tell their clients about the dangers of getting into a contract with CMHC”

“The point is that CMHC did not disclose all the material facts in a contract”

“if enough people demand that CMHC print full disclosure in its contracts”

“we did not have an agreement with CMHC, the bank did” <– BINGO!!

Class-action dude had no contract with CMHC and therefore CMHC was not responsible for disclosing anything or explaining the mortgage contract to him. No wonder his first lawsuit was dismissed.

jesse
Member

Congrats on the rollercoaster citation, and congrats to Global for starting down the path of asking some uncomfortable bearish questions to local real estate talking heads. I really think Vancouver needs a bearish talking head!

Joe_Blown_Away_By_High_Housing_Costs
Guest
Joe_Blown_Away_By_High_Housing_Costs

Jesse: You should be the bearish talking head on Global. You’re so smart. I really appreciate everything you add to these discussions.

jesse
Member

@Joe_Blown_Away_By_High_Housing_Costs: no need to be sarcastic. I have a face that’s made for blogging 🙂

logic
Guest
logic

Q: how stupid is the “young professional” who wants to give up her 700-odds bucks rent a month condo in the west end to but in surrey, and – one assumes – commute back to downtown to work. I’d rather shoot myself.

Joe_Blown_Away_By_High_Housing_Costs
Guest
Joe_Blown_Away_By_High_Housing_Costs

Jesse: I don’t want an expert with a pretty face. I want an expert who is smart, has analyzed the latest data, and will tell me the straight goods as opposed to what the corporate masters want me to hear. Jesse, I believe you fit that bill.

CanuckDownUnder
Member
CanuckDownUnder

A local RE journalist looks back at all the talk of a “buyer’s market” in Australia one year ago. It’s turns out it wasn’t quite yet time to buy! Year over year price changes to April 2012:

Sydney -2.6%
Melbourne -7.0%
Brisbane -6.4%
Adelaide -4.2%
Perth -2.8%
Darwin -1.1%
Canberra -0.7%
Hobart -8.5%
National -4.5%

http://smh.domain.com.au/real-estate-news/blogs/domain-investor-centre-blog/a-buyers-market-cometh-20120518-1yuyy.html

Anonymous
Guest
Anonymous

But that’s just it…. more and more employers are realizing that their clients, employees, and producers are out in the Burbs and are moving to Surrey, Burnaby, Richmond. Assuming a person buys in surrey but commutes to Vancouver is just wrong.

patriotz
Member

@Anonymous:
Someone who buys a condo in Surrey at today’s prices is just wrong, it doesn’t matter whether they are still working downtown or have found a new job in the burbs.

southseacompany
Member
southseacompany

Rennie says:

“With 80 per cent of the [condo] market that traded in [Metro] Vancouver last year, you only needed a household income of $52,800 to purchase. That’s not a bubble story.”

I went to the RBC website’s “How much can you afford calculator?” Typed in $52,800 as income, $20,000 as down payment, $300/mo as condo fees, $200/mo prop tax, $50/mo heat, 30 year mortgage and got $194,000 as what could be afforded.

Perhaps my assumptions were wrong. Or perhaps 80% of units sold are below $194,000?

I would love to ask Rennie were he got that income figure.

registered
Member
registered

10 southseacompany Says: “I would love to ask Rennie were he got that income figure.”

You don’t want to see the answer.

Anonymous
Guest
Anonymous

@southseacompany: He assumes that the person with the income of $52800 has no credit card debt, doesn’t own a car, doesn’t pay property tax, has no strata fees, and doesn’t heat their condo.

Other than that, his numbers are correct.

Dave
Member

Just a heads up… Bob Rennie will be on CKNW this morning and will explain why this isn’t a bubble. Listen live or hear the Archive later (9.30am).

jesse
Member

King Bob is sure making the media circuit. Wuzzup with that?

Makaya
Member
Makaya
Anonymous
Guest
Anonymous

@southseacompany: ….I went to the RBC website’s “How much can you afford calculator?” Typed in $152,800 as income, $20,000 as down payment, $300/mo as condo fees, $200/mo prop tax, $50/mo heat, 30 year mortgage and got $194,000 as what could be afforded. …

I think there’s something goofy in what you’ve done. a $194k mortgage would only cost about $1k per month to service and I find it hard to believe that someone earning 152k per year couldn’t afford $1k per month- rent would typically be more than that.

Anonymous
Guest
Anonymous

@southseacompany:

“I would love to ask Rennie were he got that income figure.”

I remember people used to say that a mortgage of 3-3.5x your annual income was considered normal. So you’d expect somebody earning $50K to be able to afford something upto about $175K. I doubt 80% of condos sold for that little, but I could be wrong. It’s possible that 80% figure is including studios, though.

Dave
Member

@patriotz:

They aren’t wrong. I don’t see any room for developers to produce condos at lower prices than present. The land costs in Surrey are relatively small on a per unit basis. Building and material costs are what they are and they aren’t going down. Profit margins are smaller than most would think. I don’t see how anybody could bring substantially cheaper units to market. That’s not to say in a bad recession and bad downturn, that a small drop in costs could not be realized, but it’s nowhere near the drop that you may believe.

registered
Member
registered

@16 Anonymous: Rennie’s claiming buying in Vancouver is affordable on ~$53K/year.

Not much of a name...
Member
Not much of a name...

@Anonymous: @Anonymous 16 – The $152k looks like a typo.

Not much of a name...
Member
Not much of a name...

@Dave: Will the re-introduction of the PST have a negative impact on builders as they lose their ITC’s on the PST portion of the HST and they are now simply expenses? Wouldn’t this increase their costs?

patriotz
Member

@Dave:
“Building and material costs are what they are and they aren’t going down”

Builders make money selling houses in Blaine for less than a crapbox condo in Surrey:

http://www.zillow.com/homes/blaine,-wa_rb/#/homes/for_sale/Blaine-WA/10430_rid/3-_beds/49.010177,-122.456703,48.84958,-122.916756_rect/10_zm/1_fr/

What natural law prevents that from being done north of 0 Ave?

Anonymous
Guest
Anonymous

@fixie guy:

“Rennie’s claiming buying in Vancouver is affordable on ~$53K/year.”

No he’s not. He’s being a little weasley with his words, but that’s not what he’s saying. He’s saying somebody on that income level could likely buy a tiny condo somewhere in Metro Vancouver. Obviously that would be a suitable type of dwelling for a family, so he’s far from declaring Vancouver to be affordable across the board. That’s just your (biased) interpretation.

Meh
Guest
Meh

OMFG

“black magic rituals with fetuses are believed to bring good fortune for businesspeople”

http://edition.cnn.com/2012/05/18/world/asia/thailand-fetuses-black-magic/index.html?eref=edition

okright
Guest
okright

@CanuckDownUnder: those declines are very small. i’d call it a sideways market.

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