69 Crikey Says: “Let’s not overstate the impact of condo and home buying by wealthy investors outside Canada…”

Agreed, where the owner lives pales in importance to where the money is earned. In terms of Canadian price sustainability, new wealthy immigrants almost certainly have a much greater, and much less sustainable, impact than tracked foreign speculation. Without a local economy of sufficient scale to justify them, inevitably prices come down.

Some insight (I may repost on tomorrow’s blog also as the day is about to turn over soon). The new rules have definitely had some impact on moving the marginal buyer’s purchases forward. This is really sad as they stand to lose the most but you can see people are just driven to make any transaction and the possibility that they will lose this ability has forced their hand. The stats are now starting to include the sales since the annoucement date and a statistically significant change in the composition of sales has emerged. Here’s what we’re seeing. 1.) SFH sales continue to be slow and will almost certainly be lower in July than June and possibly up to 20% below last year. 2.) Condo sales have spiked such that July is on track for higher than last month by… Read more »

CBC: Iranian-Canadians fume as TD closes accounts Several Iranian-Canadians are crying foul after the TD Bank abruptly closed their accounts with little explanation other than to say it had to comply with federal economic sanctions against Iran… Ghasemi said her father received some money from Iran for a down payment for a home in Canada. But that transfer took place before the new round of sanctions were introduced, said Ghassemi, who doesn’t see any legitimate reason for the letter. “We’re not involved in any sort of transaction or any sort of activity that may benefit the government of Iran. And we’re not people in Iran. We’re permanent residents and citizens of Canada,” she said. Capital flows are a cause of concern for the government, and Iran is a consistent source of wealthy immigrants. Sanctions are most likely politically motivated, but… Read more »

@Makaya:
Vancouver East is the new Richmond…

@Rightsizer: Skytrain is the new Merco…

@Best place on meth: Red is the new black

@Jigs Up:

“It seems 8s are so passe in today’s market. I think 9s are the new 8s.”

And 6 figures is the new 7 figures.

@Makaya: I assume they must have been putting funds aside into a capital fund when the buildings wear out. And if the mortgages are paid off they can refinance. If they managed their finances well there should be no concern whatsoever.

But Wright said Metro does not have a long-term capital budget to replace those buildings outright when the need arises, he added funding for redevelopment should come from the provincial and the federal governments.

I see. This whole “affordability” mantra is so comical it’s tragic.

Metro Vancouver’s 50 affordable housing complexes will need replacement, but with whose money?

The Metro Vancouver Housing Corporation operates more than 50 apartment buildings and many of those will need to be torn down and replaced within 10 to 15 years, said New Westminster Mayor Wayne Wright, chairman of Metro’s housing committee.

Wright said there is no immediate need to replace the buildings, but “it is looming, it will come …. It’s going to come back and bite us.”

The 3,600 Metro-run units provide housing to 10,000 residents throughout the region. Some tenants pay market rents, subsidizing the remaining 30 per cent of residents — 3,000 people — who constitute low-income tenants.

They shouldn’t be too worried, they already have lots of available space at the Olympic Village Village on False Creek…

@Vote Down The Facts: Here is the message I posted last night: Between capital loss, transaction costs, condo fees, property taxes, debt servicing and opportunity costs, $500k looks about right to me… Since you’re a bit lazy, here is a quick and dirty calculation I did for you: Capital loss: ($3.125m - $3m) 125,000 Strata fees: (1825*12*4) 87,600 Property taxes: ~15K/year 60,000 Interest payments (3%-25y) 290,000 Opp. costs on DP (GIC @2%/year) 50,000 Transaction costs (3% of ppty) 93,750 Total 706,350 Since he’s a flipper, he probably have put the minimum downpayment he could, but let’s get conservative and assume he put 20% down. See, with my assumptions, I get $700K loss with doesn’t include insurance cost and GST (Shangri-La was a new built). I didn’t take into account inflation. Now let’s assume the guy managed to rent out this… Read more »