Friday Free-for-all!

Yeah! It’s friday and that means it’s time for the sun to shine and for us to do our regular end of the week news round up and open topic discussion thread. Here are a few recent links to kick off the chat:

Updated inventory graph, still climbing!
2 experts debate the bubble
Blame Canada? Blame Europe!
Nokia shutting down Burnaby
Why low and stable prices are good
Will sunshine bring a tear of joy?
‘Rodeo drive north’ going south
Van West tilting at windmills
West Van sales party over
OECD: Canada suffering Dutch Disease
Bubble fears a boon to alternative lenders

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

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Patiently Waiting
Member
Patiently Waiting

Anyone else having trouble loading the Yattermatters site over the last couple days? I’ve tried on different computers and it either doesn’t load at all or hangs before completing. No problems with any other sites.

Stucco
Guest
Stucco

@VMD: you really don’t want to end up with an underwater mortgage on that one!

CanuckDownUnder
Member
CanuckDownUnder

@ZRH2YVR:

Our current place would have a ratio around 1150-1200, getting down to 1000 would still seem way overpriced to me. One of the big data providers has gross yields on Sydney units at 4.9% which seems a bit high, that works out to a ratio of 1060.

We’re planning to hold out until the ratio hits 650 and I see little reason to buy before then. We love the flexibility that renting provides us and finding 3 bedroom apartments to rent in Sydney is no problem at all. That said we may capitulate around 800 if the right place comes up and we knew with certainty that we weren’t leaving town anytime soon!

patriotz
Member

@market stats:
Price/rent always uses gross numbers only. Which is why houses and condos have different price/rent for the same investment value. A condo should be a about 2/3 of a house. Also a high tax city should have a lower price/rent than a low tax city – but all metro Vancouver cities are low tax compared to places like Montreal or Dallas.

(rent – taxes, etc)/price is called cap rate and indicates your true return on capital.

market stats
Guest
market stats

@ZRH2YVR price to weekly rent

Are these ratios factoring in taxes, strata fees and other maintenance from an owners perspective?

I figure that for many rentals, the taxes fees and maintenance the owners would be paying must comprise 30-40% of the rental income if not more. Meaning that the effective price to rent multiples could be outrageously higher.

Lemon
Guest
Lemon

@condo watcher

Correct, according to section 42, looks like they need to give you 3 months notice with a minimal year inbetween each rent increase.

VMD
Member

@Hovering:
I happen to agree with you re: Europe. Going to watch the election closely. Will be quite interesting if Syriza wins. Spain and even France may come into spotlight very soon. I’ve held some epv (ultrashort europe) and ery (3x bear energy) for several months, just in case europe/world economy blows up… (So far they’ve gained 20% and 40% respectively from March trough) Risky play I know, just a little gamble~

Will concerted central bank efforts overwhelm the deflationary forces? We’ll find out over the next few months!

VMD
Member

@ZRH2YVR:
(Just for laughs) Look what I found, a waterfront house at 529.6 weekly rent, in Richmond. Under 1000x weekly rent, great investment? 😉

For sale: $165,000
MLS V952136
http://www.realtor.ca/propertyDetails.aspx?propertyId=11965970&PidKey=848739895

Same house for Rent: $1350/month. 800sf 1Br+Den
http://vancouver.en.craigslist.ca/van/apa/3062062463.html

(Caveat: it floats, hope you do too)

Hovering
Guest
Hovering

@Anonymous:

i happen to think what’s happening in europe at the moment will have a slightly larger effect on my timing of buying back into vancouver real estate than the chattter on this blog (as fantastic as it is).

I am fascinated to see what happens with the election in greece on sunday. I expect it will not yet lead to greece exiting the euro. something will be slapped together to keep them in the club (but they still can’t pay their russian gas bill).

eventually the euro mess will be the shock that pushes canada back into recession and our housing markets off the cliff..

as an aside, has anyone seen the article on kleptomacy (sp?) in china? great piece. no idea if it’s accurate.

all of the above is relevent, imho, to VCI.

N
Guest
N

@ZRH2YVR:

My rent just went up by 10% and is now 1731 weeks.

yvr2zrh
Member

@CanuckDownUnder – re: Ratio.

Our rent in downtown on Beach Ave. is 1,850 weeks. That’s a really long time. What I was wondering is if you are saying that at 1,000 – it’s a good time to buy or 1,000 is still too much. 1,000 would be pretty good here in Vancouver. That would be a large decrease from today’s prices.

condo watcher
Guest
condo watcher

@Anonymous
@Lemon
i think you both should read the BC Tenancy Act–you have a lot of mis-information there–try here

http://www.bclaws.ca/EPLibraries/bclaws_new/document/ID/freeside/00_02078_01

CanuckDownUnder
Member
CanuckDownUnder
@patriotz: That’s an amazing stat patriotz. I was discussing investing with the father-in-law the other day and he was trying to convince me that buying when prices are 1000X weekly rent is a good rule of thumb. That still works out to a price/rent ratio of 230 using monthly rent. He also thinks we’re close to that ratio in Sydney today but he must just want us to buy since we’re nowhere near that level. In our suburb you would have to pay 1000X the weekly rent on a 3 bedroom 2 bathroom unit to buy a 2 bedroom 1 bathroom place. There will (may?) be another small surge in prices here since some juicy home owner’s grants are being removed July 1 but even the most committed bulls have given up calling for a return to the price increases… Read more »
Many Franks
Guest
Active Member
Many Franks

An article with a blind spot the size of a condo tower.

From Interest Rate Increases: Why No Canadian Is Safe:

[…]Approximately 31% of Canadian mortgages [are] at a variable rate, meaning one-third of Canadians are vulnerable to interest rate increases on their mortgages.

On the other side of the same coin, the other two-thirds of Canadians are also vulnerable to interest rate increases when their current low rate fixed mortgages come up for renewal in coming years.

News flash! Not every Canadian has a mortgage. That seems like a pretty major error, given the headline.

Don't call me Shirley
Guest
Don't call me Shirley
Months of Inventory (MOI) calculations for each of BCREA’s sale regions for the month of May 2012. Many kind thanks to the BCREA for publishing timely and accurate sales and inventory data. BC Northern Inventory: 2859 Sales: 465 MOI: 6.1 Chilliwack Inventory: 1901 Sales: 241 MOI: 7.9 Fraser Valley Inventory: 9051 Sales: 1511 MOI: 6.0 Greater Vancouver Inventory: 18911 Sales: 2897 MOI: 6.5 Kamloops Inventory: 2258 Sales: 220 MOI: 10.3 Kootenay Inventory: 3337 Sales: 210 MOI: 15.9 Okanagan Mainline Inventory: 6735 Sales: 611 MOI: 11.0 Powell River Inventory: 281 Sales: 32 MOI: 8.8 South Okanagan Inventory: 1959 Sales: 159 MOI: 12.3 Northern Lights Inventory: 260 Sales: 39 MOI: 6.7 Vancouver Island Inventory: 6808 Sales: 694 MOI: 9.8 Victoria Inventory: 4060 Sales: 636 MOI: 6.4 Provincial Totals Inventory: 58420 Sales: 7715 MOI: 7.6 Outside Vancouver Inventory: 39509 Sales: 4818 MOI: 8.2… Read more »
Anonymous
Guest
Anonymous

@Arthur Fonzarelli: I would pay money to see freako go toe to toe with Pastrick. Deep in the archives of VCI are some legendary takedowns at the hand of old boldface

Get out much?
Guest
Get out much?

@al:

This story is three years old. Welcome to 2012.

Patiently Waiting
Member
Patiently Waiting
A few weeks ago, I witnessed my first trash-out of a rental apartment (in a purpose-built building at that). At first I thought someone was moving, but then noticed the workers were just throwing furniture off the second floor balcony. Wood was getting smashed. It was going in one of those big garbage containers home renovators use. I looked in the container, a family abandoned the place fast, not looking back. Kids stuff, personal effects. Even a wheelchair, to my dismay. These weren’t dirty people. They must have lived well not long ago. A few weeks later, the apartment still looks empty from the street (no blinds). And no, I don’t think its gross or anything. The other day I noticed a jeep with a flat time in front of the building with a flat tire and and a sticker… Read more »
Anonymous
Guest
Anonymous

@ Lemon

gotcha, thanks!

Lemon
Guest
Lemon

@Anonymous

In that case, they can come back whenever and ask for an increase before next month’s rent. They can’t ask for an increase of months already passed though.

TNT
Guest
TNT

Confused says

Buy hi sell lo

Patiently Waiting
Member
Patiently Waiting

@jesse: “Apparently 3 years of purchases, at a time when there has been approximately flat prices in many segments, is causing some increased urgency to get more revenue.”

Raising rents at even 4.3% won’t fix their problems any time soon. This will lead to urgency to sell their money-holes.

Anonymous
Guest
Anonymous

@lemon.

I’m in a 5 year residential (condo) lease, but it does state that they can raise it the allowable amount per year. It’s just that at the end of the first year when they came to collect another years worth of cheques they never asked for an increase, I’d assume that means that I’m safe for another year…but maybe they can just come back in a month’s time and say they forgot to raise it a month ago and are wanting to do so now.

Arthur Fonzarelli
Guest
Arthur Fonzarelli
David Madani does great analysis but Helmut wiped the floor with him. It was like he was on a teleconference at the same time or something… they need somebody like Jesse or Meth or Makaya on there! Love Pastrick’s logic: prices increase faster than rents that’s why they will continue to do so. As opposed to the logic that the two are misaligned and will return to long term average ratios. Talk about tautological: why are price:rent ratios so out of whack? Because price to rent ratios are out of whack, of course! I’m on the fence whether we’ll hit 20,000 this year – to me the numerator won’t be as important as the denominator going forward… if sales slow and the delists aren’t too egregious – and/or if we get enough new lists to offset the seasonal delists we… Read more »
al
Guest
al

A 13-storey residential building under construction in Shanghai collapsed on Saturday, killing one worker and highlighting the dangers of shoddy building in fast-urbanising China.

http://in.reuters.com/article/2009/06/27/idINIndia-40638820090627

China…What next?