An Architectural Gem Saved
Vancouver, being part of the west coast, is equally criticized and applauded for its youth. Civilization as we know it barely spans two centuries in this corner of the world, and while that can generate a sense of dawning opportunity and exuberance, it also means that we sometimes lack the refinement, conscience, and depth of a European city.
This criticism is often leveled at Vancouver’s architecture. It’s true that we have yet to build our Notre Dame. The city is not without highlights, however, and I’ve spent many an evening ambulating among them. Here is a favourite from one such stroll:
On this occasion I noted with considerable shock that there was a notice of development staked out in front. My heart sinks when I see these as it usually means another treasure is being cast blindly onto the profiteer’s pyre.
I needn’t have worried. Here is the text of that notice:
The developer here promises to convert the existing Heritage Building. My initial doubts temporarily at bay, I resolved to further pursue the matter with City Hall. I can’t abide by a half-hearted restoration. And there again, good tidings. Birmingham & Wood, the architectural firm contracted to perform the work, appears to be undertaking the job with the best of intentions. From their Design Rationale document:
The property, listed as a B resource in the City’s Heritage Register, is important for its age, and for its material, form and character that are typical for worker’s housing from the very early 20th Century. [...] Following best practices for heritage conservation, the intent of the rehabilitation work to the house is to preserve original form and material wherever possible, replicate original material where the original is beyond repair and where the original is well-documented, and to construct new additions using a compatible idiom that will not fool the viewer into thinking new is old.
Very promising indeed.
Nonetheless, I decided to capture the piece in its current state. A few photographs are a paltry memento compared to the property itself, but one learns with age not to miss opportunities because “there will always be another time.”
Often a guided tour is required to bring the life of a building to the fore after steps have been taken to preserve it. Not so here; the building’s long and storied history is immediately apparent. As observed by Birmingham & Wood,
The house is associated with some legendary characters in the last couple of decades.
Further back along the property — and I trust you’ll excuse my inept photography — the house tells the story of its own construction. Contemporary trends towards airy spaciousness and exposed composition here show a history of flooring materials, doorway expansion, and modern waterproofing and insulation; repairs to the exterior using reclaimed carpeting show charm and flair.
Yet further back, the original construction of the house shines through. The more recent extension to the right, constructed of discarded mattresses and pallets, demonstrates the sort of mixture of new and old that I hope Birmingham & Wood will use for their inspiration. Above that, the air conditioning unit proves that respecting history need not mean doing away with modern conveniences.
Finally, the rear corner of the building, again showing the original rustic construction overlaid with modern workmanship:
I hope you can see, as has the new owner of the building, potential here for a revitalization. If you, like me, take an active interest in the preservation of our architectural capital, I hope you’ll browse the City of Vancouver’s public documents on the project.
September 17th, 2012 at 12:10 am 1
Why such a long post when you can just say “POS”?
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September 17th, 2012 at 12:14 am 2
If they’d torn it down you’d have been complaining about all the old buildings being lost to developers. Can’t win.
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September 17th, 2012 at 12:22 am 3
@Vote Down The Facts:
Ah, here we go: http://vreaa.wordpress.com/2011/09/06/vancouvers-second-oldest-house-a-teardown-dates-to-1888-when-vancouver-had-6000-people/
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September 17th, 2012 at 7:27 am 4
UPDATE 1-Canadian existing home sales drop in August
17 Sep 2012 09:54 ET
* Sales down 5.8 pct m/m, 8.9 pct on year
* Declines seen across most of country
* Tighter mortgage rules have cut demand – economist
TORONTO, Sept 17 (Reuters) – Sales of existing homes in Canada dropped in August from July, notching the biggest month-over-month decline in more than two years, the Canadian Real Estate Association said on Monday in another sign Canada’s long real estate boom is cooling.
The industry group for Canadian real estate agents said sales activity was down 5.8 percent in August from July. Actual sales for August, not seasonally adjusted, were down 8.9 percent from a year earlier.
“While we always caution that housing market trends at the national level can and do run counter to trends in many local markets, the decline in activity in August was definitely the result of much of the country moving in the same direction,” CREA President Wayne Moen said in a statement.
Sales declines were reported in about two-thirds of local markets representing 80 percent of national activity, with monthly sales drops in almost all large urban centers, including Toronto, Montreal, Vancouver, the Fraser Valley in British Columbia, Calgary, Edmonton and Ottawa.
The real estate group said a move by the Canadian government to tighten mortgage lending rules and limit the amount of debt new homeowners can take on to buy a house has dampened demand, just as the government had hoped it would.
“August’s sales figures will no doubt provide comfort to policymakers, providing the first clear indication that the recent changes to mortgage regulations aimed at cooling the market are working as intended,” Gregory Klump, CREA’s chief economist, said in a statement.
The group said a total of 334,208 homes have changed hands over Canadian Multiple Listing Service systems so far this year. That represents a 2.8 percent increase compared with levels reported over the first eight months of 2011 but a narrowing of the 4.5 percent lead for year-to-date sales activity in July.
The national average price for homes sold in August, not seasonally adjusted, was C$350,192 ($361,022), up 0.3 percent from the same month last year.
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September 17th, 2012 at 7:46 am 5
@Vote Down The Facts: “If they’d torn it down you’d have been complaining about all the old buildings being lost”
I think the point is what a joke Vancouver architecture is. This is all we have to preserve. A house built with the quality of a typical tree fort.
Hot debate. What do you think?
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September 17th, 2012 at 8:26 am 6
very humorous! sourly humorous by bears! they just wish once in their lifetime, that piece of valuable land belongs to them! they are just dumb enough that they cannot see past the top of the land. Time to move to Zurich or ottawa.
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September 17th, 2012 at 8:41 am 7
@Anonymous: “I think the point is what a joke Vancouver architecture is. This is all we have to preserve. ”
Nonsense.
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September 17th, 2012 at 8:41 am 8
Looking forward, I’m pretty sure about this:
- listings will continue high; sales low through October.
- increasing numbers of delists as we go forward will slow total inventory growth through October.
- put this together and inventory will top out at 20K and change in late October.
- Going by history (including 2008), we should expect total inventory to drop 3-4K in November December. Then another 3-4K over the holidays, leaving us around 13K to start January. This happens because many people delist for the holidays.
- with inventory in the 13K range, price pressure won’t be as high as it has been this fall. February-March is normally the largest price gains of the year because there are lots of spring buyers but little inventory.
- January-April 2013 will see a huge orgy of new listings. The regular flow of listings plus all the stuff that didn’t sell in 2012. The number of new listings will be near record-levels.
Here’s what I’m not sure about:
- sales in 2013. If low sales in 2012 have been caused by people being reluctant to buy at current prices, then this could easily reverse itself. There would be a lot of pent-up demand from people who naturally would have bought in 2012 but don’t want to wait any longer. On the other hand, if low sales in 2012 are because willing buyers are unable to buy because of credit limitations and new OSFI/CMHC/Bank rules, then this will continue in 2013 unless those rules change.
- If I had to predict, I would say sales in 2013 will come off record lows–but at best up to an average level. Combined with super high new listings, we should be able to gain 2K inventory a month, putting us back to 20K by April or so. I would guess we’ll see a slow down in price drops in January-April, but drops resuming thereafter as inventory balloons up again.
Hot debate. What do you think?
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September 17th, 2012 at 8:43 am 9
Repost from last thread:
From the Canadian Business article:
” But while the average resale home price has jumped nearly 128% since 2000, rents have risen by just 16.7%, as measured by the Consumer Price Index. “
You can sum up the bubble perfectly in this short sentence. I don’t know anything more telling of the insanity that is Vancouver RE.
In a healthy market that was truly going up on fundementals like the bulls keep saying such as “limited land”, “inter-prov immigration” etc the rents would have kept pace perfectly.
This fact completely destroys the Bull argument.
Hot debate. What do you think?
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September 17th, 2012 at 9:01 am 10
“Civilization as we know it barely spans two centuries in this corner of the world.”
I know this is a humour piece, but I am wondering how many First Nation readers will find this sentence funny…
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September 17th, 2012 at 9:28 am 11
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September 17th, 2012 at 9:30 am 12
LOL! Very good!
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September 17th, 2012 at 9:36 am 13
@Vote Down The Facts: I really hoped the point of this post would be obvious. My apologies; I just can’t seem to avoid obscurist humour.
This is a teardown crack-shack of the worst kind and there is *nothing* here to preserve. I just wish I knew how much the new owner paid for it and how much the architect estimates it’ll cost to “rehabilitate”.
I wonder if the heritage designation is being used to get concessions on bylaws such as zoning, and the owner and architect will waste as little time as they possibly can on the heritage aspect. It’ll be a rehabilitation by the letter of the law only (and no surprise, given that anything else is impossible — just look at those photos).
Alternately, and more probably, the heritage designation may be an albatross that any potential developer has to wrestle with. In either case, “heritage” is a pretty laughable word to use around this heap of junk.
(It looks like it was listed at a cool half million. No idea what it sold for or exactly when.)
@jumpin in: Hence the “as we know it.” Meaning, let’s arbitrarily say, a civilization inclusive of the pocket watch and vaccination.
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September 17th, 2012 at 9:39 am 14
@jumpin in: “Civilization as we know it barely spans two centuries in this corner of the world.”
I know this is a humour piece, but I am wondering how many First Nation readers will find this sentence funny…”
It depends on your definition of civilization.
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September 17th, 2012 at 9:42 am 15
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September 17th, 2012 at 9:43 am 16
@Vancouver: “I will repost until this is not foreclosed on….”
And I’ll be more than happy to keep foreclosing.
Wow! Major trolling this early in the morning. Could it be a zero sales day?
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September 17th, 2012 at 9:48 am 17
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September 17th, 2012 at 9:56 am 18
Vancouver Troll’s “I will re-post until not foreclosed on” is just so disrespectful to the readers and contributors of this blog. These re-postings have continued from last night, after several of Vancouver’s repeat posts were foreclosed on.
The voting up/down of comments on this site is very democratic. Any reader, no matter whether they are bull, bear (or NDP contrarian like me) gets one vote. If your comment was voted down to the point of foreclosure, it means the diverse readers of this blog don’t like what you have to say. When you repeatedly re-post foreclosed comments, you are showing utter contempt for the democratic nature of this voting process. It just makes me mad that someone could be such a douche bag.
I almost want to say that this re-posting of foreclosed comments should not be allowed. But I won’t go that far to say that VCI admin should stop this. I guess if someone has nothing better to do with their time than to continuously re-post comments, why stop them? I guess it’s better than this realturd going out and trying to sell a property.
But it’s just so disrespectful to all of us. I don’t agree with everyone on here but I respect that everyone has a right to their opinion and a right to their one vote per comment. If your comment is foreclosed on you should respect that the democratic marketplace of followers of this blog disagree with you and you should move on, or try to re-state your argument in a more compelling/convincing way.
Hot debate. What do you think?
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September 17th, 2012 at 9:58 am 19
@Vancouver:
Except,
I do NOT pay one bedroom $1650! My West End TWO bedroom, TWO bathroom, with insuite laundry, parking and storage included, costs exactly $1650 per month. If I owned, I’d be paying over 3000 with taxes and maintenance fees. So please, cut the b.s.!
Therefore, if you find morons that will pay your mortgage for you, keep them, buy them Christmas gifts etc. end every once in a while send them thank you notes!
Hot debate. What do you think?
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September 17th, 2012 at 10:00 am 20
@Vancouver: “Can’t handle being a ….” down click.
I like this game.
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September 17th, 2012 at 10:01 am 21
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September 17th, 2012 at 10:01 am 22
@joe_blown_away_by_high_housing_costs: what is the point? any bullish post is being voted down. that tells you how open minded this blog is!
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September 17th, 2012 at 10:02 am 23
@Vancouver:
I can say that in the case of my rental unit, it is far cheaper to rent than buy. I have done the simple math.
Hot debate. What do you think?
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September 17th, 2012 at 10:04 am 24
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September 17th, 2012 at 10:04 am 25
@Vancouver: “Being paranoid is pathetic.”
Being an idiot is moronic, but some wouldn’t know that.
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September 17th, 2012 at 10:06 am 26
@Vancouver: …..I would be buying in an instant…..
How can I help you realize your dream? Really, if I can help you purchase in any way, short of lending you the money, I will. I’d love to see you get everything you deserve.
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September 17th, 2012 at 10:07 am 27
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September 17th, 2012 at 10:10 am 28
@Anonymous, Vancouver
I would appreciate reading a compelling bull argument for Vancouver. Don’t just give me one example of a rental unit which could be an exceptional, outlier case, assuming that your numbers are correct. One example does not make a compelling argument.
I want to see something that looks at the fundamentals and the large scale trends, variables such as incomes, rents, pop. growth, immigration, credit availability, inventory levels, supply, demand. Use those variables based on large data sets, not just one example, to make the bull argument.
I am very open minded. I am not beholden to any one ideology or bull/bear position on the market. I can be convinced and persuaded in either direction, if someone makes a strong enough argument. I would welcome a strong bull argument and I would vote it up.
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September 17th, 2012 at 10:12 am 29
Every $350-400k condo rents for $1650-1800 currently.
Every $550-600k condo rents for $2150-2400 currently.
Please show me facts otherwise. Please!!!!
Rent is killing me in this city. I could be saving a fortune by owning……NO JOKE!!!
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September 17th, 2012 at 10:12 am 30
@Vancouver: you might be wrong on that. the people on this blog earn 6 figure incomes, have several PhD degrees, a few sacks of cash in the bedroom, and …rent!
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September 17th, 2012 at 10:13 am 31
@VHB: “I would guess we’ll see a slow down in price drops in January-April”
Prices are usually more robust in the first half of the year than the second half. Part of that in my view is due to logistics surrounding schooling transitions as well as a “tradition” of buying/selling in the spring.
I’m harping on this population growth thing but I think there are a few harbingers that do not bode well for 2013:
1) Population growth is unlikely to markedly rebound. That means lower dwelling formation than was the case in 2009.
2) Construction starts have bounced off their lows and have continued to grow into this year. Completions, however, are still relatively low compared to past years. Completions lag starts and are set to rebound in 2013.
3) Unabsorbed multis are high. I don’t have the data in front of me but they have been high for a while. Builders will become more loath to hold this as time passes.
4) OSFI risk management oversight is unlikely to be fully implemented until early 2013. That involves geographic risk management practices that will make credit more difficult to obtain in Vancouver compared to other areas of the country because of Vancouver’s high values relative to incomes and rents.
5) This may not be completely relevant but it looks to me like Asia is set for a marked investment slowdown in the coming years. I think 2013 will show more cracks forming, literally and figuratively.
There is a long way to drop to return prices to their long-run trend. That has to happen at some point, and I think will surprise some (most) people what that means: sales need to be significantly slower than past years even to maintain flat nominal prices. A 0% change in prices would need an average months of inventory around 7. A -3% annualized drop, which would put prices reverting over about a decade (!) would mean average months of inventory into the 8-9 range. Because of seasonality that means MOI must be worse than this in the fall.
I’m looking for price drops in 2013. Not sure by how much but I’ll conservatively put it at -3% (nominal) with “downside risks” to that
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September 17th, 2012 at 10:15 am 32
“@Vancouver: you might be wrong on that. the people on this blog earn 6 figure incomes, have several PhD degrees, a few sacks of cash in the bedroom, and …rent!”
Cute! Don’t make fun of them, they will foreclose you.
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September 17th, 2012 at 10:19 am 33
@Vancouver
“Why even worry about prices when you don’t have 2 cents to rub together to buy even a nice dinner out.”
You don’t know that. I think there are a lot of very wealthy bears who wish to invest their money in things that will make them money and they believe real estate is a money loser right now. Garth Turner comes to mind–his blog is more about where to invest your wealth as opposed to just being a real estate blog.
THat said, I admit I have next to no money and I rent. But I still have a stake in this argument about real estate. I have watched as the real estate bubble has absolutely decimated my community in Vancouver. I have watched as people have been forced out of their homes en masse. Actually, I have been displaced personally. For me, I connect the troubles renters face with renoviction straight back to the real estate bubble. Developers are only interested in building ownership housing as opposed to rental housing, which is why renters have had such a rough go of it in recent years. I am an urbanist who believes we should be preserving buildings with a sense of character and a sense of place. My ancestors built this city. I detest how this real estate bubble has caused so many historic buildings to be demolished. So I absolutely reject the notion that poor people and renters have no right to participate in the bear/bull debate. Renters still pay income taxes and our tax money is going to go to CMHC once owners start defaulting on their mortgages. So it’s quite ridiculous that low income people who struggle just to pay the rent end up subsidizing these middle class homeowners who have overextended themselves. Also, I think we all have a stake in the local economy. Our local economy has become too focused on real estate. Once this goes bust, there will be generalized economic malaise spreading beyond just the real estate bubble. Many renters who never even participated in the speculative mania may find themselves out of a job because of a burst bubble. Or we may find ourselves out of a job even before the bubble bursts because so many businesses can’t afford the high rents/land costs in Vancouver and formerly industrial/institutional land that provided jobs for people gets used for condo development. So there are loads of ways renters and poor people have a stake in the real estate bubble debate.
Hot debate. What do you think?
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September 17th, 2012 at 10:25 am 34
Vancouver, my nice, new one-bedroom rents for $1,550. Similar units in the building are priced at close to $500k. Do the math.
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September 17th, 2012 at 10:27 am 35
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September 17th, 2012 at 10:29 am 36
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September 17th, 2012 at 10:29 am 37
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September 17th, 2012 at 10:33 am 38
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September 17th, 2012 at 10:37 am 39
@Vancouver: Here is a little example for you:
This place rents for $1900 (I was actually renting it for $1800 before I left a few weeks ago).
In the same building, a similar unit is for sale at $498K.
With 10% down (25 years @4%), your mortgage payment will be $2367 to which you have to add $310 in condo fees and probably about the same in property taxes. So you’re looking at $2987 per month (which does not include the maintenance you might have to do.
In the first year, your total mortgage payment will be $28,405, of which $10,747 will go to your principal and $17,657 in interest payments.
So, on a monthly basis, your interest payments+condo fees+ppt taxes would be:
$1471+310+300= $2081
So here it is: cheaper to rent than to own in Vancouver and no financial risk regarding RE price decline.
You’re a renter? Be happy then…
Hot debate. What do you think?
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September 17th, 2012 at 10:41 am 40
@Vancouver:
I wrote a message for you but it got stuck in the moderation list. So here is the same message split in 2:
This place rents for $1900 (I was actually renting it for $1800 before I left a few weeks ago).
http://www.crosbypm.com/properties/395/
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September 17th, 2012 at 10:41 am 41
@Makaya: That’s not fair, your not supposed to use actual numbers, you’re supposed to make them up (or at least arbitrarily chop of the top 20%). As long as you don’t use actual numbers and ignore all the risk a condo here can look like a decent buy.
Hot debate. What do you think?
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September 17th, 2012 at 10:41 am 42
5 Anonymous Says: “I think the point is what a joke Vancouver architecture is.”
Vancouver once had some truly unique and wonderful buildings that came down for the current crop of generic teal towers. A real shame.
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September 17th, 2012 at 10:42 am 43
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September 17th, 2012 at 10:42 am 44
@Vancouver: ….$400k mortgage at 3% = $12,000….
Actually: $400k mortgage at 3% = $20,000 but you’ll have to renegotiate next year. But don’t let that get in the way of a lousy argument.
Only 10 more grades to go and you’ll graduate from high school. Hang in there!
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September 17th, 2012 at 10:44 am 45
Makaya – now go back and use the current 3% mortgage rate.
Grade 2 people!
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September 17th, 2012 at 10:45 am 46
Anonymous –
Grade 2 again for you!
$12,000!!!!!!!!!!!!!!!
The other $8,000 is YOUR money!!!!!!!!!!!!!!!!!
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September 17th, 2012 at 10:46 am 47
@Vancouver
You are only calculating interest costs in the mortgage, not principal payments.
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September 17th, 2012 at 10:49 am 48
groundhog – exactly!!!!
Who gets the rest of the money?
Why is this so hard to understand?
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September 17th, 2012 at 10:49 am 49
@Vancouver
“Grade 2 again for you!
$12,000!!!!!!!!!!!!!!!
The other $8,000 is YOUR money!!!!!!!!!!!!!!!!!”
Jeez, sorry I responded your argument. Thought you were just doing a simple miscalculation. Now I see you’re not worth responding to.
Hot debate. What do you think?
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September 17th, 2012 at 10:55 am 50
@Vancouver: “You could be SAVING $2,100.”
Only if you’re not earning anything on that 100K DP you implied. If you can’t earn 2.1%, you’re probably dead.
I have a great idea!! Why not just up your DP to 40%? Then you’re saving even MORE!
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September 17th, 2012 at 10:56 am 51
@joe_blown_away_by_high_housing_costs: Something like what’s done at /. or others is to allow filtering of comments below a certain threshold. I also don’t mind the idea of a separate “troll” flag.
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September 17th, 2012 at 10:56 am 52
@Vancouver:
Not everybody can qualify for 3% and these low rates might not last as long as you would hope. Now, how about opportunity cost on your downpayment? You might as well take than into account, since you may lose your entire DP in the coming RE decline (Cam says prices down 9% from a year ago!)…
There are none so blind than those who refuse to see
Hot debate. What do you think?
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September 17th, 2012 at 10:58 am 53
@Vancouver: …..The other $8,000 is YOUR money….
By that logic, so was the $100k down payment in your example, why don’t you drop that from your la-la land calculation they you could buy that $500k house with $500k down then you actually get it for free. It won’t cost you anything. Where do I sign up?
Are people really this stupid? God, I hope this guy doesn’t have access to a gun (even a plastic one).
Hot debate. What do you think?
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September 17th, 2012 at 11:00 am 54
A sea of red on the blog this morning! Just like Vancouver home moaners.
I think the number of local Vancouver realtors just dropped from 11,000 to 10,999.
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September 17th, 2012 at 11:00 am 55
@Vancouver
Here is a rent vs. buy calculator. I’ll give you the benefit of doubt and assume you just have made a mistake in understanding. Try plugging you’re original example in and see what happens if home prices stay flat, never mind any decline.
http://www.nytimes.com/interactive/business/buy-rent-calculator.html
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September 17th, 2012 at 11:02 am 56
@Vancouver: ….Why is this so hard to understand?…
Well that is the problem, isn’t it. But don’t worry, they cover it in great depth in grade 3.
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September 17th, 2012 at 11:05 am 57
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September 17th, 2012 at 11:07 am 58
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September 17th, 2012 at 11:07 am 59
@Vancouver: …I’ll give up…
You should hang in there, grade three is easier.
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September 17th, 2012 at 11:08 am 60
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September 17th, 2012 at 11:09 am 61
@Vancouver
“I’ll give up because no one here even agrees on using interest only.
DUMB!”
I’m glad we got that sorted out. I bet you’re a used house salesman and that argument probably used to work on some people.
Hot debate. What do you think?
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September 17th, 2012 at 11:09 am 62
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September 17th, 2012 at 11:11 am 63
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September 17th, 2012 at 11:12 am 64
@Vancouver
I’m sorry for giving you the benefit of doubt and taking the time to help you by providing the tools necessary to learn.
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September 17th, 2012 at 11:13 am 65
“By that logic, so was the $100k down payment in your example, why don’t you drop that from your la-la land calculation they you could buy that $500k house with $500k down then you actually get it for free. It won’t cost you anything. Where do I sign up?”
Aren’t conventional down-payments 20% in Canada?
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September 17th, 2012 at 11:17 am 66
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September 17th, 2012 at 11:24 am 67
@Vancouver: So what about the interest income you could be earning on the downpayment when you stay on the sideline. 2% of $75k is $1,500 a year.
What about maintenance cost? $0 in your calculation.
What about strata special assessment? 0% chance of occuring, in your calculation.
You are low in your strata fee and property tax estimate. Prove me wrong by showing a link.
Hot debate. What do you think?
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September 17th, 2012 at 11:28 am 68
I’ve often heard the same fallacious argument stemming from the misallocation of the principal payment. Considering principal payments to be “YOUR” money is just double-counting idiot-math, in my mind. I’ve come up with an analogy on this point. It’s not entirely thought through, so comments/criticisms appreciated.
I’m going on the assumption that a person purchases a home, via a mortgage, from a vendor. Let’s equate this to a person purchasing a new TV, via their credit card, from a retailer. (And assume they don’t really have the money for it, so they’re paying 15% or whatever)
When you purchase your new TV on your credit card, you’re paying the 15% interest charge, and hopefully paying down some of the balance, too. The balance payment would never be considered “YOUR” money: this is what you paid to the retailer (via your credit card company) in exchange for your new TV. You don’t get both the TV and the money. The retailer gets the money. The 15% interest payment is what you paid for the benefit of having your new TV without actually having the money to purchase it. Now, of course, you could sell your TV on Craigslist for x% of what you originally paid, but then you won’t have your TV anymore. Someone else will have your TV, and you’ll have “YOUR” money.
Now, copy & paste to a home purchase. The principal payment is not “YOUR” money. It’s what you paid to the vendor, via your new mortgage, for your new house. It’s not “YOUR” money any more than the balance payment on your credit card. The interest payment is what you’re paying for the benefit of financing your new house.
Hot debate. What do you think?
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September 17th, 2012 at 11:32 am 69
@Vancouver: “interest only in calculating a comparison to rent.”
Nope. If you cannot understand why, you need to get yourself hired at a company with a pension plan and step away from “self-directed”. Don’t take it personally.
Hot debate. What do you think?
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September 17th, 2012 at 11:34 am 70
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September 17th, 2012 at 11:36 am 71
OMG – what has this blog come to today???? At 65 comments, I thought we had something useful to talk about like 25% drop in BC wide sales are reported by Economist Cam . . . and his association. . . I’m jetlagged – - check back in tomorrow.
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September 17th, 2012 at 11:38 am 72
Vancouver… you are idiot if you think you should use interest only.
This blog has gone to hell.
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September 17th, 2012 at 11:38 am 73
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September 17th, 2012 at 11:42 am 74
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September 17th, 2012 at 11:42 am 75
@Vancouver: “Renters insurance in Vancouver is double the rate of owners.”
Not true.
Hot debate. What do you think?
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September 17th, 2012 at 11:44 am 76
@Vancouver: “jesse – stop proving to me how dumb you are. answer the question on where the balance of your mortgage payment is going.”
I am not Jesse, but I have shown you that there’s a cost to paying a downpayment vs. earning interest income by keeping the $ in your own bank account. Same idea with principal repayments.
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September 17th, 2012 at 11:56 am 77
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September 17th, 2012 at 12:03 pm 78
@Vancouver: “gokou3 – ok I’ll earn 1.2% in my bank account. thanks for the tip.”
Ya, that’s really not too bad considering the gross cap rate for Vancouver RE is 4-5% (probably 2-3% after paying all the carrying costs) and prices are going down.
Btw, you are short-changing yourself by parking your money at 1.2%. You can earn 2% easy if you dig around a little bit.
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September 17th, 2012 at 12:19 pm 79
oooohhh BNN guy is saying a 25% drop is to conservative!
Hot debate. What do you think?
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September 17th, 2012 at 12:21 pm 80
@Anonymous: URL?
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September 17th, 2012 at 12:21 pm 81
@Anonymous:
“Considering principal payments to be “YOUR” money is just double-counting idiot-math, in my mind.”
Principal payments, whether the down payment or the principal part of the monthly payment, ARE your money. They are an investment, not an expense. But the opportunity cost on them is an expense.
Hot debate. What do you think?
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September 17th, 2012 at 12:22 pm 82
@gokou3: “You are low in your strata fee and property tax estimate. Prove me wrong by showing a link.”
I’d agree the strata fee is a little on the low side. About $250/month seems more appropriate for a 1 bedroom in an example building, such as the Spectrum: http://www.6717000.com/spectrum-a/listings/
As for the property tax, I’d say their estimate is on the HIGH side as a resident owner would be eligible for the Home Owner Grant.
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September 17th, 2012 at 12:27 pm 83
Anonymous,
Re: drop of 25% too conservative. Yeah, just saw that BNN interview as well.
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September 17th, 2012 at 12:29 pm 84
” where the balance of your mortgage payment is going”
You’re trying to justify how a mortgage is superior to rent while conveniently ignoring opportunity costs. You are out of your league, even a “dumb” guy like me can see that. Your comments are being voted down not because they are unpopular but because they are wrong.
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September 17th, 2012 at 12:42 pm 85
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September 17th, 2012 at 12:44 pm 86
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September 17th, 2012 at 12:47 pm 87
BNN guy was super bearish:)
they’ll have the video up on their page soon enough, the interview was about 10 minutes ago
http://watch.bnn.ca/#clip762459
Hot debate. What do you think?
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September 17th, 2012 at 12:48 pm 88
@Vote Down The Facts:”I’d agree the strata fee is a little on the low side. About $250/month seems more appropriate for a 1 bedroom in an example building, such as the Spectrum: http://www.6717000.com/spectrum-a/listings/
As for the property tax, I’d say their estimate is on the HIGH side as a resident owner would be eligible for the Home Owner Grant.”
According to http://jaybanks.ca/real-estate/greater-vancouver-property-tax-calculator/
The property tax for a $375k unit is $1520 before grant. Max grant is $570, so I would say it’s not too far off OP’s estimation of $1300.
(Not sure what one needs to be eligible for the “maximum” grant)
Btw, does it bother anyone that there are 28 active listings in a 210-unit downtown building (supposedly the creme de la creme? I won’t agree though)? That’s 13% of units for sale. Where’s the HAM when you need them?
Hot debate. What do you think?
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September 17th, 2012 at 12:58 pm 89
I’ll STFU forever now. bye.
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September 17th, 2012 at 1:03 pm 90
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September 17th, 2012 at 1:10 pm 91
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September 17th, 2012 at 1:12 pm 92
I love everything about this post. Thanks Many Franks.
Hot debate. What do you think?
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September 17th, 2012 at 1:18 pm 93
@Vote Down The Facts:
If we’re going to use Spectrum as an example, seems the claimed rent is on the high side:
http://vancouver.en.craigslist.ca/van/apa/3212115622.html
Hot debate. What do you think?
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September 17th, 2012 at 1:21 pm 94
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September 17th, 2012 at 1:26 pm 95
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September 17th, 2012 at 1:27 pm 96
@Vancouver:
This is assuming someone puts down $75K on a 375K property (20%) which I think is VERY ideal for most. Realistically, it would be more like 37,500 at most and that changes the numbers in a big way.
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September 17th, 2012 at 1:27 pm 97
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September 17th, 2012 at 1:29 pm 98
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September 17th, 2012 at 1:30 pm 99
@patriotz:
I agree the rent is on the high side. About $1500 is my estimate for a downtown (not west end) 1 bedroom. $1600-1700 is probably for a larger unit, which would come with an asking price considerably over $375k.
Hot debate. What do you think?
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September 17th, 2012 at 1:33 pm 100
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September 17th, 2012 at 1:48 pm 101
Polygon’s RiverWalk just dropped price.
originally “Priced from $598,000”
now “Priced from $568,000”
-$30k, that’s a start.
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September 17th, 2012 at 1:53 pm 102
And just like that, the spammy posts will be gone. I love the new format!!! WTG!
Hot debate. What do you think?
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September 17th, 2012 at 1:54 pm 103
Crapflooding gets an IP ban.
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September 17th, 2012 at 1:55 pm 104
@ScubaSteve: I like that you can see the positive negative balance on votes now as well.
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September 17th, 2012 at 2:04 pm 105
“crea cuts forecast for housing sales for 2012 and 2013″
why forecast at all when all they do is adjust it at any sign of change?
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September 17th, 2012 at 2:19 pm 106
Before the bulls argue about banning bullish comments, I want to say that I support opposing views, but not non-sensical, repetitve trolls whose intent is to mess up the board and prevent useful discussions.
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September 17th, 2012 at 2:28 pm 107
@VMD:
re: Polygon’s RiverWalk, apparently in addition to the price drops, they also are throwing in “$19,000 worth” of bikes/kayaks/etc as the “live by the river package” incentive.
Granted, the package’s actual value is probably $15,000
If you buy now, you get a $45,000 better deal than the original suckers.
(still a sucker though)
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September 17th, 2012 at 2:29 pm 108
Pope,
Can you not block “Vancouver?”
Hot debate. What do you think?
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September 17th, 2012 at 2:29 pm 109
NO it’s not much cheaper to buy vs. rent now in Vancouver.
1-bedroom downtown is $1650 to $1700 = $20,000 per year. Not sure about that rate, I believe you selected an overpriced unit.
I looked up a 550square foot place downtown for $375K on MLS and then searched craigslist for similar units in buildings in the area.
$1400 to $1600 is the range I saw = $18,000 Per Year
$75,000 down-payment = Lost income 75K use to purchase divide stock (TELUS ~4% divided) = $3000 per year
$300,000 mortgage at 3% = $9,000 (3% for 5 years.. but after that?) moves up to 6% (Closer to the Historically normal rate) and you are done…
Property Tax = $1,300 (it can be higher but not lower)
Strata fees = $2,700 (You can use the lower end but the assessment will be higher)
Special Assessment fee = $1000 (could be nothing could be $30,000)
Upkeep = replace plumbing, fridge, stove, painting, flooring, etc. This is hard to define = $500 (could be nothing could be as much as you want to spend)
Insurance = $1500 used this site
http://www.vancouvercondo.com/homes.aspx?tabid=215777&__ts=1347914856751 to calculate the rate.
Total $19,000 per year.. No principle paid.
No saving in my calculation, actually you come out about $1000 behind.
Vancouver – you have your numbers and logic for calculating the cost… I encourage you to purchase if you see this as a bargain.. Just do it!
The big question is why do you need to repost your logic? This group that will see holes in you logic that you have not thought of or care to consider.
Buy a place and post your sucess story one year from now, I would like to see that post. Yes I will eat my words if you are successful.
Hot debate. What do you think?
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September 17th, 2012 at 2:33 pm 110
Meanwhile, from our friends from the House Hunt Victoria blog:
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September 17th, 2012 at 2:35 pm 111
@J: “Insurance = $1500″
No chance that Condo insurance costs $1500/year. More like $300-400. But if you start to include insurance then it’s only fair to assume that the renter buys contents insurance as well.
Hot debate. What do you think?
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September 17th, 2012 at 2:48 pm 112
I was using this site:
http://www.vancouvercondo.com/homes.aspx?tabid=215777&__ts=1347914856751
Here the results I received using the number Vancouver was talking about…
Your customized rent versus own analysis is based upon:
An initial monthly rental payment of $1,500.00. We assume that your rent will increase by 2.5% per year.
You are considering buying a home valued at $375,000.00, with a down payment of 20% or $75,000.00. Your monthly mortgage payment of $1,151.44 includes both principal and interest and is based upon a loan amount at an interest rate of 3%. Because your down payment is less than 20%, we have included Mortgage Insurance to be paid on a monthly basis.
Summary:
You should keep renting.
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September 17th, 2012 at 2:51 pm 113
@Vote Down The Facts: My parents who rent bought the content / liability insurance for $400+, and I am pretty sure they aren’t getting ripped off. No way an owner’s insurance will cost less than this.
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September 17th, 2012 at 2:51 pm 114
@admin:
Thanks, Pope!
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September 17th, 2012 at 2:54 pm 115
@gokou3: To clarify, I would argue that the DIFFERENTIAL insurance premium between an owner and a renter is at least $500.
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September 17th, 2012 at 2:54 pm 116
Don’t forget about the $15K in realtor fees on that $375K unit when you sell that condo in a few years and at least $1K/year in out of pocket expenses and repairs that would not be paid as a renter. People always seem to forget transactional costs in these equations which are a huge expense.
Hot debate. What do you think?
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September 17th, 2012 at 2:55 pm 117
renters insurance is more than owners insurance!
-typical owner insurance for a one bedroom 700 square foot condo $240 a year
-typical insurance for the same place, but now you’re renting approx -$340
I’m renting back a unit I sold about 18 months ago, the above scenario was my personal experience.
Hot debate. What do you think?
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September 17th, 2012 at 2:59 pm 118
and my contents are insured for the same as when I was an owner…
me thinks that wawanesa trusts owners more than renters:)
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September 17th, 2012 at 3:03 pm 119
@Cam
““Consumer demand continued to trend lower in August – tighter mortgage credit conditions introduced in July appear to be taking a toll on an already tentative market. However, with home sales slower than improving economic conditions suggest, a rebound may be in store before year-end.”
calling for a rebound before year-end
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September 17th, 2012 at 3:04 pm 120
@gokou3: “No way an owner’s insurance will cost less than this.”
Yes, it can cost less than that. But that’s not my point – which is that it certainly doesn’t cost $1500!
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September 17th, 2012 at 3:15 pm 121
@VMD:
I apologize for providing the incomplete price drop figures.
Upon further digging, the Original advertised asking price for Polygon’s River Walk was “attractive price point starting from just $638,000″, on May 18,2012.
- That was reduced to $598,000
- Then to $568,000 plus $19,000 incentive
i.e. $89,000 cost difference (14%) between now and May 2012.
that’s gotta be greater than the down payment of at least some of the early buyers.
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September 17th, 2012 at 3:22 pm 122
@VMD: Trying to play a little bit of devil’s advocate: could it be that polygon didn’t release the lower-priced units until now? i.e. is the $638k home from back then same spec as the $568k+$19k incentive home now?
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September 17th, 2012 at 3:29 pm 123
@vangrl:
“-typical owner insurance for a one bedroom 700 square foot condo $240 a year”
$20/month for owner’s insurance? Mind telling us from whom?
The other thing is that a renter has the option of not getting insurance, while an owner with a mortgage doesn’t.
Hot debate. What do you think?
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September 17th, 2012 at 3:30 pm 124
@gokou3:
I suppose it’s possible, but not sure how common that strategy is (especially during the glorious days of red hot Van RE).
There are 4 floor types (see bottom of page for original pricing), plan B is the cheapest and is the price quoted in advertisements.
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September 17th, 2012 at 3:50 pm 125
@VMD: Ya, plan B is the smallest plan and looks like they are still pushing it:
http://www.polyhomes.com/community/riverwalk_townhomes_vancouver/floor-plans
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September 17th, 2012 at 3:52 pm 126
Something that made me go hmmm.
I thought part of the reason behind the change to the HPI was to standardize what the typical home was across the country. This would allow for a proper comparison between different cities. If this is the case, why does the CREA still report RE prices using averages?
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September 17th, 2012 at 3:58 pm 127
@Vote Down The Facts: ….But if you start to include insurance then it’s only fair to assume that the renter buys contents insurance as well….
Except that only the renter can actually afford the contents.
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September 17th, 2012 at 4:01 pm 128
@Anonymous: “Except that only the renter can actually afford the contents.”
That’s right, 70% of Canadian houses don’t actually have anything inside them. *rolls eyes*
Hot debate. What do you think?
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September 17th, 2012 at 4:02 pm 129
wawanesa
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September 17th, 2012 at 4:03 pm 130
http://business.financialpost.com/2012/09/06/canadas-new-mortgage-rules-will-cool-housing-but-higher-rates-still-needed-td/
“TD Bank says tighter mortgage rules should do the job of cooling Canada’s hot housing market in the short term, but higher interest rates will be needed to return the market to saner levels.”
Oh no! Higher rates! If Vancouver can’t even bear the shortening of amortization (which has the effect of 1% increase in mortgage rates), what will happen when the actual mortgage rates increase?
Hot debate. What do you think?
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September 17th, 2012 at 4:06 pm 131
@patriotz
“The other thing is that a renter has the option of not getting insurance, while an owner with a mortgage doesn’t.”
an owner with a mortgage doesn’t have to have insurance. Being on strata for many years, i’ve seen many cases where it turns out that an owner wasn’t insured
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September 17th, 2012 at 4:12 pm 132
if an owner doesn’t have insurance and say a water damage claim is below the “buildings insurance”, then the owner is on the hook for all costs. If they don’t repair the damage, the building will go ahead and hire a company to repair damages and charge back to that suite.
If the damage is more than the buildings insurance deductible (usually either $5000 0r $10000) the the owner is actually in a better place, because the buildings insurance has to kick in at that point to fix the property.
Of course the buildings insurance does not cover the owners contents or any renovations that might have been done, it only covers original replacement value.
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September 17th, 2012 at 4:13 pm 133
@vangrl: More potential losses to the banks then.
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September 17th, 2012 at 4:14 pm 134
@patriotz: It’s close enough $1600/month, given that the landlord wants an extra $100/month for a parking space and an extra $50/month for a storage unit.
What I find intriguing about this apartment is that it is a 1BRplus den in only 502 sq. ft of living space!!
The den must be huge!
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September 17th, 2012 at 4:14 pm 135
@vangrl: “Being on strata for many years, i’ve seen many cases where it turns out that an owner wasn’t insured”
Pretty sure that breaks one of the conditions of their mortgage – usually the lender insists on being designated as first payee.
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September 17th, 2012 at 4:17 pm 136
Agree with comment before, thanks Many Franks for some good original material/satire for this blog.
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September 17th, 2012 at 4:24 pm 137
@vangrl: “If the damage is more than the buildings insurance deductible (usually either $5000 0r $10000) the the owner is actually in a better place, because the buildings insurance has to kick in at that point to fix the property.”
In my experience the building insurance deductible is usually charged back to the owner. Somebody has to pay the deductible.
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September 17th, 2012 at 4:24 pm 138
@vangrl: me thinks that wawanesa trusts owners more than renters:)
It’s not that the company trusts any single person (or class of persons) more than any other. That’s just how the numbers work out. On the whole, renters cost insurance companies more than do owners, so prices are adjusted accordingly. This is the reason why, despite the fact that I have moved about a dozen times in the last 15 years (2 continents, 5 countries, 8 cities), my “home” address has remained my parents’ place in Coquitlam.
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September 17th, 2012 at 4:26 pm 139
Canadian Business article is gone
Hot debate. What do you think?
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September 17th, 2012 at 4:26 pm 140
@VMD: Did you make sure to count only the interest portion of any mortgage required to purchase the place?
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September 17th, 2012 at 4:30 pm 141
@reasonfirst: Wow, this is crazy. Fortunately, this link still work:
http://www.canadianbusiness.com/print/98306
and google still has a cached copy:
http://webcache.googleusercontent.com/search?q=cache:NxM1pKjG3IsJ:www.canadianbusiness.com/article/98306–canada-s-housing-crash-begins+&cd=1&hl=en&ct=clnk
Hot debate. What do you think?
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September 17th, 2012 at 4:32 pm 142
@gokou3:
Back when I had a mortgage I was required to have insurance for precisely this reason. Has this changed?
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September 17th, 2012 at 4:38 pm 143
I can’t access the Canadian Business article “Canada’s Housing Crash Begins” either. I linked to it on my facebook page when it first came out, but now when I click on that link on my facebook page, it comes up as 404 page not found.
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September 17th, 2012 at 4:38 pm 144
Finally some balls in house.
http://www.ipolitics.ca/2012/09/17/permanent-residents-who-live-abroad-could-lose-status-kenney/
Hot debate. What do you think?
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September 17th, 2012 at 4:40 pm 145
Ummm… there’s definitely a ghost in that last picture.
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September 17th, 2012 at 4:40 pm 146
“In my experience the building insurance deductible is usually charged back to the owner. Somebody has to pay the deductible.”
woops, yes you’re right, i forgot about the charge-back.
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September 17th, 2012 at 4:41 pm 147
Another example of a crack-shack type house being rehabilitated is currently under development at 8th & Macdonald. The original house had been used as a grow-op, the roof had actual holes in it, the siding was rotted and the house was uninhabitable. The purchaser (or owner, I’m not sure) of the place applied for heritage designation, received it and, along with the “heritage” designation got a huge density bonus. Instead of a bungalow on a 33″ lot there is now the original house, moved to a corner of the lot but renovated into several suites, a laneway house and some sort of townhouse thing in the middle of the lot. The house directly to the east was also incorporated into the mess of suites currently being built but, yes, applying for heritage designation does seem like a scam when you only have to retain a very minimal amount of the original structure.
Hot debate. What do you think?
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September 17th, 2012 at 4:42 pm 148
@oneangryslav2:
“On the whole, renters cost insurance companies more than do owners, so prices are adjusted accordingly.”
This is an example of a bogus correlation. Renters are riskier as a group because their collective socio-economic status is different from that of owners. But that does not mean that the same person is riskier as a renter than as an owner. You could draw the same bogus correlation by race, except of course insurers are prohibited from using this as a criterion.
A year or so ago Marketplace had a show on this kind of thing, for example a guy who had his home insurance rates boosted because of a change in his credit rating.
Insurance companies are too lazy to evaluate factors which really determine risk so they use the bogus correlations as proxies.
Hot debate. What do you think?
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September 17th, 2012 at 4:45 pm 149
@Chabar:
What balls? It’s already the law that a permanent resident loses their status if they spend too much time abroad, just enforce it. Instead we get a whole page of weaseling from Kenny.
Hot debate. What do you think?
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September 17th, 2012 at 4:53 pm 150
@patriotz: “Insurance companies are too lazy to evaluate factors which really determine risk so they use the bogus correlations as proxies.”
You can call it lazy, but it’s really efficiency. Customers in aggregate will pay higher premium if the insurer needs to create a detail profile for each customer before setting prices.
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September 17th, 2012 at 4:55 pm 151
@patriotz:
I agree with this; but it is a correlation nonetheless. I’m not saying that I agree with it, or that it is just, only that this is what happens. When you run statistical regression analyses in this area, the more times one moves residence, the more likely s/he is, for example, to need the car insurance company to come to her/his assistance, other things being equal. I understand that correlation does not equal causation, but the insurance company actuaries are neither social scientists nor philosophers; they are number-crunchers.
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September 17th, 2012 at 4:55 pm 152
@gokou3:
You can get around that by tying your renter’s insurance to your car insurance, as I did.
Well maybe not “you”, but it works where car insurance is private sector.
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September 17th, 2012 at 5:02 pm 153
@oneangryslav2:
It also just occurred to me that there’s an element of adverse selection here, since given that renter’s insurance is discretionary those who get insurance are probably more likely to have more to lose from theft, or more likely to be victims of it (which is where most claims come from), while owners get insurance pretty much across the board.
On the same general topic, I’ve heard that decades ago home insurance claims by total value were about 2:1 fire:theft while today it’s the other way around.
Hot debate. What do you think?
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September 17th, 2012 at 5:11 pm 154
@vote down the facts
“Pretty sure that breaks one of the conditions of their mortgage – usually the lender insists on being designated as first payee.”
but how would they know? you have to buy insurance annually, you don’t renew your mortgage annually.
All I’m saying is that I’ve personally seen a fair amount of incidences where owners aren’t insured, of course they could have been mortgage free i guess
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September 17th, 2012 at 5:15 pm 155
@vangrl: “but how would they know? ”
They probably wouldn’t know, until a situation arose that required the insurance to pay out. At that point I imagine they’d sue you into oblivion.
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September 17th, 2012 at 5:26 pm 156
@patriotz: Adverse selection is a problem with any insurance regime. This is why both Romneycare and Obamacare insisted that everybody should be forced to purchase health insurance under threat of financial penalty.
Hot debate. What do you think?
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September 17th, 2012 at 5:37 pm 157
I also can’t reach the Canadian Business “Canada’s Housing Crash Begins” article. I realize there was a false alarm over the weekend, but now it really does seem to be gone?
Meanwhile this August 8th article mocking bears is still available: http://www.canadianbusiness.com/blog/consumer_insight/94619–housing-bears-make-more-unsubstantiated-claims
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September 17th, 2012 at 5:42 pm 158
New Listings 316
Price Changes 171
Sold Listings 89
TI:19116
http://www.paulboenisch.com
Well-loved. Like or Dislike:
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September 17th, 2012 at 5:51 pm 159
@paulb: The sales are higher than the troll indicator says
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September 17th, 2012 at 5:56 pm 160
Kind of surprising to see sales this low, as I think we must be getting September originations by now. I woulda expected a few days in the 120-150 range.
Hot debate. What do you think?
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September 17th, 2012 at 6:09 pm 161
The winds are whispering….
I’m hearing from the great unwashed that “prices will probably go down for about three years”
On the radio this morning they talked about prices being off 9% in Vancouver (and the new CREA data).
The tide of sentiment is changing, I wonder…could we see listings rise faster than many of us envisioned? Could we see prices crack faster than expected as the common mantra adjusts to “sell NOW or be priced IN forever”?
Stranger things have happened. Thanks PaulB….looks like things remain BEARISH.
Well-loved. Like or Dislike:
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September 17th, 2012 at 6:15 pm 162
here is the BNN clip.
http://watch.bnn.ca/#clip762533
not sure how credible this guy is, but i guess if Cam Goode can get airtime I guess this guy deserves to as well.
Hot debate. What do you think?
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September 17th, 2012 at 6:17 pm 163
@paulb Hmm… quite a few expired listings over the weekend. From my account it looks like there were 210 – where normally it’s about 130-140.
Actually other than the end of month expirations I actually didn’t see any weekends with more than 180 expired listings in the last 6 months.
Well-loved. Like or Dislike:
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September 17th, 2012 at 6:22 pm 164
Under 1500 sales? That is historically horrible, which may explain why the trolls are panicking so emphatically. Wave your arms faster, boys, I’m sure that will work….
We had lots of delists today–just gained 17 net. The climb to 20K may be slower than we thought.
Well-loved. Like or Dislike:
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September 17th, 2012 at 6:30 pm 165
@oneangryslav2: Maybe I’m coming in too late on this, but at the moment I happen to be carrying both homeowners and renters insurance (living in two places at once). The renters insurance is dirt dirt dirt cheap. it’s costing <$100 to cover 50k (60k? maybe even). Whereas the homeowners costs more than 10x that to cover 280k. Same insurance company.
Hot debate. What do you think?
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September 17th, 2012 at 6:31 pm 166
http://www.vancouversun.com/business/real-estate/Mortgage+rules+exacerbating+housing+sales+slump/7256186/story.html
Hot debate. What do you think?
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September 17th, 2012 at 6:45 pm 167
@Joe_blown_away: From the article: ““Provincially, overall unit sales are expected to be down 4.4 per cent this year before rising 7.5 per cent in 2013,” said Muir.”
Lol!
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September 17th, 2012 at 7:06 pm 168
Vancouver, for once, is not bucking the trend.
http://www.vancouversun.com/business/real-estate/Mortgage+rules+exacerbating+housing+sales+slump/7256186/story.html
Hot debate. What do you think?
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September 17th, 2012 at 8:30 pm 169
A few years ago Cam Muir was commenting on a local blog about Vancouver’s bubble (or lack thereof). Was that here or was it on van-housing.blogspot.com? His exchange with freako was hilarious, was wondering if that exchange could be pulled for public view again.
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September 17th, 2012 at 8:38 pm 170
Perhaps Cam smokes his first blunt before his morning coffee?
What else can explain it?
Oh yeah, he’s a PAID shill, I forgot…that said, what else should we expect – the truth? Ha! Fat chance.
Let thousands of families get shackled with a lifetime of debt instead….
Hot debate. What do you think?
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September 17th, 2012 at 8:44 pm 171
The National will be profiling the “big chill” in real estate market across Canada the entire week.
Thursday they will be covering Vancouver.
Lead story tonight: http://www.cbc.ca/player/News/TV%20Shows/The%20National/ID/2280540119/
Well-loved. Like or Dislike:
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September 17th, 2012 at 9:00 pm 172
Anyone know what 347 East 34th sold for last year? I see someone gave it a redo and is now asking 1,049.000, will be interesting to see what it sells for.
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September 17th, 2012 at 9:02 pm 173
@Joe_blown_away: From the article: ““Provincially, overall unit sales are expected to be down 4.4 per cent this year before rising 7.5 per cent in 2013,” said Muir.”
So there we see the REBGV spin strategy: discourage listings and panic by acknowledging a little bit of reality now about the market being off (which is undeniable anyway) and holding the carrot that everything will be better next year so don’t panic. Then they hold their breath and wait until Spring.
The sad part, the psychology of this bubble is so ingrained in locals that they will believe this jive. Unless more things happen to erode this psychology. How can us bears reinforce the current trends in negative sentiment? Any suggestions? Ranting on blogs and voting down trolls is not enough. Time to get off the sidelines bears!
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September 17th, 2012 at 9:04 pm 174
Remember when US home sales started to fall in 2005?
Then prices tumbled starting in 2006?
http://4.bp.blogspot.com/-xEnnpMP6v40/UDToSGvJxvI/AAAAAAAAPrY/s5vqcHgPKgQ/s1600/EHSJuly2012.jpg
It’s our 2006.
Well-loved. Like or Dislike:
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September 17th, 2012 at 9:14 pm 175
Quoting crea
“It expects the average national home price to rise by just 0.6 per cent this year, to $365,000. And next year, it says it will likely fall one-tenth of a per cent to $364,500, with Ontario and B.C. seeing small price declines while other provinces see modest gains.”
Lol
Hot debate. What do you think?
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September 17th, 2012 at 9:18 pm 176
“Time to get off the sidelines bears!”
Agree, Facebook all negative articles, let’s get this ball rolling faster
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September 17th, 2012 at 9:20 pm 177
@gokou3:
I hate to disagree with Gokou but – - I will tell you that my renters insurance is extortionate. We’re talking over 1,100 per year. (Assets are pretty high thought). I can tell you that when I moved here it was tough to find a company that would rent to tenants with more than 100,000 of contents. I would say this is because in the North American model, you would likely not have accumulated so much in non-real estate assets before you plunked down $50,000 to buy a box in the sky.
Remember- this is just the content insurance. When you look at a homeonwer’s policy, you are also insuring structure if you are not strata. If you take that risk out, the cost of the contents insurance is much much less than what you get in a tenant’s policy.
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September 17th, 2012 at 9:24 pm 178
http://www.vancouversun.com/business/Developer+inexperience+behind+Little+Mountain+delays/7256600/story.html
Might be a bit more than inexperience behind the developers delay…just saying
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September 17th, 2012 at 9:33 pm 179
Re: renters Insurance
I would suggest going to market @ renewal if you haven’t done so in awhile. I have about $80k of coverage with Earthquke rider. Was paying $800/yr. but got that knocked down to $445 by changing providers. I work in insurance so yes, I did read the fine print and both policies were pretty much identical. Policy also has rider to cover my grandparent who lives in the basement. I would be happy to refer the broker who assisted me if anyone is interested.
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September 17th, 2012 at 9:44 pm 180
Is it just me or does today feel like we have turned a corner and are about to see things really escalate?
We bears are now the majority for sure, reading te comments on ths article pretty much confirm that there really aren’t any bulls left
http://www.theglobeandmail.com/report-on-business/economy/housing/canadas-housing-market-cools/article4548858/comments/
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September 17th, 2012 at 9:53 pm 181
@Makaya:
7.5 increase next year says Scam. What a pile of crap. This guy licks his finger, sticks it up in the air and throws out this number… Zero rationale…
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September 17th, 2012 at 9:59 pm 182
@Muff Diver Mike:
It would be interesting to get Cam’s prediction from last year, for this year…
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September 17th, 2012 at 10:05 pm 183
@Anonymous
That article states: “Four years ago, BC Housing started moving the 224 residents of a social housing project into other subsidized homes.”
In fact, the displacements from Little Mountain started over 5 years ago in March 2007 when BC Housing opened the Relocation Office on the site.
The fact that a major redevelopment would start off with mass displacement before any consultation with the community (which did not start until 2010–after all but these last few tenants had already been displaced) makes this redevelopment look like it is straight out of the 1950s/60s like urban renewal.
This is a BC Liberal privatization gone off the rails.
The developer entered into the purchase agreement in Spring 2008–before the Global Financial Crisis that hit later that year in the fall. He paid a very high price for the land (although the price is not public info, it is subject to a confidentiality clause in the purchase contract–a public asset sold off and we have no idea for how much). During the liquidity crisis of 2008, the developer was forced to turn his attention to save the Ritz Carlton project in Downtown Vancouver.
The developer is Holborn Properties, owned by Joo Kim Tiah. Joo Kim Tiah is from the billionaire Tiah family in Malaysia. They were on the Forbes rich list in 2008.
Hot debate. What do you think?
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September 17th, 2012 at 10:09 pm 184
@Muff Diver Mike:
A couple of comments. The YTD sales for 2012 are likely to be the worst since the 90′s. 2008 was very bad and sales stopped the last 3 months so that may still be worse but we have a very good chance to make it. That being said, the next step in the market will not be sales volume increases caused by liquidity, it will be sales volume increases because the sellers will reduce price to make a sale and this will cause an uptick in volume. It will not be significant but starting from a low base, it is not inconcievable that volumes will be up next year. Remember the forecast is not for higher prices, just higher volumes. On price decrease, first volume decreases, then prices fall and transactions continue to be made.
Separately, looking at the market now, one key stat is that the attached market is slowing fast now. This is what is taking us to the lowest market sales volumes in 12 years. Van-West forecasting about 220 units this month and 11.5 MOI. That is amazing.
On the MOI, I will see if I can get a table together in the next couple days for all areas. For now, most markets are deteriorating still. North Van at 12 months? When was the last time we saw that? Burnaby now trending to 19 months?
West Van has upticked slightly in sales for first half of Sep so we are no longer at 22 but have decreased to 15 (however, this could be spun to read “West Vancouver detached housing sales up 50% in one month”.)
Well-loved. Like or Dislike:
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September 17th, 2012 at 10:37 pm 185
@jesse: Here is something Cam wrote and I responded to:
Cameron Muir, chief economist with the B.C. Real Estate Association, said Gartman’s observation ignores the prevailing economic conditions that brought about past “price breaks,” such as the crushing interest rates of the early 1980s, or the economic stagnation that B.C. experienced in the late 1990s.
“[That] history repeats itself certainly is a truism,” Muir said. “But all the circumstances of history have to repeat.”
Of all the things Cam has said, this one has to rank near the top of the WTF-o-meter. Is he really saying that a crash is not possible unless the exact circumstances of 1981 are repeated? If that is his claim, then it is very silly.
What’s next: ‘prices can’t crash so long as Hall and Oates are not in the top 10.’
Hot debate. What do you think?
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September 17th, 2012 at 10:39 pm 186
@Anonymous:
“it will likely fall one-tenth of a per cent”
Yeah. Likely.
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September 17th, 2012 at 10:40 pm 187
@jesse: Hi Jesse. The comments on the old blog are long gone. Some update to the blogger software ate them a few years ago. But here is a post I culled from the comments at that time:
Some words from Cameron
We had a visit this afternoon from Cameron Muir in the comments. (At least, someone claiming to be him – from what he says it appears legit to me anyway.) We’ve had a bit of discussion here at VHB about him and we’re happy that he took the time to comment.
Here are his five points with my ‘counterpoints’ beneath:
CM: 1) CMHC is self-funded, except for the adminstration of federal funds to assist in affordable and assisted housing initiatives.
VHB: Yes, I have looked through CMHC’s annual report and you are correct that CMHC takes no subsidies at present – it raises revenue primarily through the mortgage insurance fees. It is a crown corporation, not a government department. Yes, yes, yes. However, there is a huge contingent asset on the books – in the form of the federal government guarantee on CMHC’s debt. If you do not think this is valuable to CMHC, then I propose an experiment: let’s remove the government backing on the bonds and see how much the yield changes. If it does not change, then the explicit guarantee is meaningless. However, I suspect the yield would in fact increase.
CM 2) Your comments regarding the 50% of downtown condos purchased by investors is close (47%) but was the findings of CMHC sponsored research into the investor activity during the 1990s. It is available to the public and I have mentioned this figure numerous times.
VHB: I got the 50% number from a Bob Rennie interview. Not a scientific source, but it was the only one I could find. I don’t think I claimed anywhere that CMHC was actively hiding this info from us, I just might be too lazy to invest the time to find it. Or, it might be that CMHC charges for this info and I didn’t want to pay for it. In any case, thank you for providing the actual number.
CM 3) While migration is an important component to forecasting housing demand. A demographic method should also include trends in ownership rates, household growth, changing age cohorts, and dwelling choice propensity to name a few.
VHB: No large disagreement here – but I think a lot of these things may not be ‘exogenous.’ That is, they respond to house prices rather than being solely a determinant of them. Household formation, ownership rates, dwelling choice propensity, for example. One should be careful in modelling to make sure we don’t think these things are universal constants or deterimined solely from factors outside the system.
CM 4) It is interesting that you paint me as a market booster when my forecasts have in fact tended to underestimate price increases rather than overestimate them during the current cycle.
VHB: You are right that many here (me included) have labelled you a ‘market booster’. I suppose I could play the ‘pull a quote from the press out of context and demand that Cam defend it’ game, but I’m tired of seeing that crap in the election so I’ll take a pass on that for now. Let’s just say that, from my point of view, my problem is not so much with your ‘point estimate’, but with the fact that the full range of potential outcomes is not considered. I know that the press etc. don’t want a predicted distribution of prices; or probabilities, or anything that looks like hard math. But that’s where I’m coming from.
CM 5) While I work as part of team of excellent analysts and surveyers, we do not suffer interference from any stakeholder or corporate brass.
VHB: I believe I have said earlier (I may try to find the link later, but there are a *lot* of Cameron Muir-inspired posts on this site!) that I have absolutely no doubt that you and the CMHC guys are above the board and completely honest. However, when one hangs out with developers and lots of ‘sell side’ guys all day, I wonder if their mindset does not have some influence on one’s thinking. I’m talking psychology here, not financial.
Finally, from one of the comments he says:
CM: We are in the midst of a strong housing cycle but not a classical housing bubble scenario.
VHB: First, thank you for acknowleging that there are cycles. I am a bit startled that this doesn’t even strike you as even slightly akin to a ‘classical housing bubble scenario’. I wonder what would look different?
Hot debate. What do you think?
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September 17th, 2012 at 11:32 pm 188
@YVR2ZRH: I’m not sure if you are actually disagreeing with me. For sure your insurance cost is high due to the high value of your content. My guess is if you are a homeowner, your homeowner insurance would be even higher?
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September 18th, 2012 at 8:49 am 189
Two replies from CBO:
Where is the article Canada’s Housing Crash Begins?
=-=
Ray,
Sorry for the inconvenience. The online stories follow a publishing schedule and that story in question was unintentionally released early. It will be available again on Monday.
Regards,
Don Sutton
Online Managing Editor,
Canadian Business
=-=
Hi Ray,
It’s on newsstands everywhere. If you’re looking for it for free online, I’m afraid it’s not there (at least not yet). We’re offering less free content now and will soon be moving to a pay model where only a few articles will be free each month. Thanks for your interest.
C.
Conan Tobias
=-=
Pick which response you like.
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October 3rd, 2012 at 6:33 am 190
It is interesting how you have observed the impact a architectural gem can have. Your blog is great. Very valuable information Many.
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