Is the door closing on home buyers?

Airborne Canine pointed out this PDF from the Real Estate Board of Greater Vancouver arguing that taxes and government regulation are putting home ownership out of reach of buyers.

That’s right, it’s not a problem with prices, it’s the PTT and ‘government regulation’.

As Best Place on Meth angrily points out, that last one is a bit odd.  The recent changes to insured mortgages weren’t government interfering more in the mortgage market, it was less.  They’re simply rolling back the increases in amortization terms to their historical norm.

He also points out a math error:

“How much do the new federal rules cost a buyer of a $609,500 home with a 15% down payment of $91,425?
$270.20 more per month”

In order to make that math work you have to disregard that you’ll be paying that lower monthly cost for 5 more years which means more interest payments.  In fact a 30 year mortgage under the old terms would cost a buyer $53,849.76 MORE than the new 25 year standard term over the life of the loan.

The proposal to reduce property transfer tax and lobby the federal government to increase the amortization period for government-backed insured mortgages doesn’t actually address the root problem: Speculation has driven house prices beyond what the local economy can support.  Trying to juice the market further is not a long term solution.

On a side note Data Junkie is a commenter on this blog who says they’ve done some work for the REBGV as a government relations policy analyst.  If you have a questions about his experience working at the board you can post them in the comments section below.  The highest rated questions will be sent on for Data Junkie to answer.

And last but not least 604x points out that the Select Standing Committee on Finance and Government Services accepts submissions from anyone through their web portal:

https://www.leg.bc.ca/budgetconsultations/survey.asp

As 604x puts it:

Perhaps some of our VCI heavyweights like Jesse, Scuba, VHB, VMD, b5baxter, AG Sage, and the rest could submit summary data illustrating the insanity of past government policies and the impact of CMHC loosening.

The big push now from real estate lobby groups seems to be on restoring the bubble through looser finance and tax breaks. The Committee needs evidence that the bubble is ultimately destructive over (and short-term pain of adjustment downward in prices will help everyone over the longer-term).

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Rip Van Winkle
Rip Van Winkle
7 years ago

Been out of the loop for a couple of years and only tuned in here after the media went nuts with all the crash forecasts and dire warnings in September. Haven’t seen stuff like that in 08, 95, or even 90. Have to go all the way back to 82 for such doom & gloom when our market dropped a mere 45%.

Even checked the “Real State Talks” form aka the “Jonny Horton Blog”.
Got totally confused as Jonny and most the old whack jobs seem to be gone, but still litered with realtors and bulls in denial. Thank God jesse inserts a few rational comments over there. Also surprised that they seem to have cleaned up the bad language, name calling and sick cartoons.

Anyone know whats going on over there???

deanbc
deanbc
7 years ago

@Data Junkie:
Thanks for the answer. I work in politics and I can tell you that extreme economic illiteracy is the norm. Most people can’t see past their immediate self-interest, and so the world turns…

Anonymous
Anonymous
7 years ago

@crashcow: “Rear-view mirror analysis, Part II. This time, it’s our favorite clown, Scam Good:”

Poor Cam; he’s run out of places to take a dump.

Anonymous
Anonymous
7 years ago

@patsan: “Another head shake?”

Yes, please keep shaking, it’s not working yet.

jesse
7 years ago

@patriotz: “So there’s no excuse for not starting 6 years ago”

Other than it’s viewed as politically unpopular in marginal constituencies.

patriotz
7 years ago

@mac:
” The fundamental problem is that the price you sell for your home is private… as in covered by your government-granted Right To Privacy. ”

That is dead wrong, the entire title history of every property including sale prices and mortgages is legally public domain and always has been.

You have to pay a nominal price to see the title, but the price of any property that sold in the last year can been seen on the BC assessment website.

The real estate boards won’t release their own data simply because they use it as a perk to get customers.

patriotz
7 years ago

@Patiently Waiting:
“Its only been a majority government since last year, so we’ve only seen the beginning of it.”

You are missing one of my main points, which is that almost all the immigration issues are enforcement ones which do not require any legislative changes. So there’s no excuse for not starting 6 years ago.

gordholio
7 years ago

Chabar/VMD: And *still* (at least according to realtor.ca), there’s not a single SFH in all of Richmond priced under a half million dollars. And just one (1) under $600K.

My god, this is going to be epic.

gordholio
7 years ago

#115, crashcow: Sweet gathering of quotes, dude.

Someone (I’ll take the job) should send that off to Cam himself (if we can track him down somewhere between here and his *new* BPOE, Phoenix), just to remind him what a deceptive little prick he is.

“Tip of the iceberg” my arse.

Chabar
Chabar
7 years ago

@VMD:

WTF… how this city got fubared when such shithole as Richmond has as many houses over 1M, amazing isn’t it? I always get shocked on and on…

VMD
7 years ago

Richmond’s Largest Price Decreases
“today’s (Oct 3) average price decline is 10% and goes as high as 27%”

YVR2ZRH
7 years ago

I think after looking at all the stats – shuold the headline of today not have read:

“Is the door closing on home sellers?”

UnagiDon
UnagiDon
7 years ago

@Girlbear:
“I used to work for REBGV, as a government relations policy analyst”.

Best. Pickup-line. Ever. =)

crashcow
7 years ago

Rear-view mirror analysis, Part II. This time, it’s our favorite clown, Scam Good:

“Chinese families are exploring foreign real estate now more than ever.” – Feb 2011 (BNN)

“Buyers from Mainland China are a driving force in our real estate market. The staggering truth is we’ve seen just the tip of the iceberg” – Apr 2011 (Van Sun)

“We are really at the very start of a big wave of demand coming mostly from the uber-rich in China” – Jun 2011 (Global TV)

“fewer offshore investors are looking to get into the market compared to a year ago. The shine has gone off Canada” – Oct 3, 2012 (Van Sun)

vangrl
vangrl
7 years ago

“Kenney is personally going to Ireland to recruit his kinfolk.”

sweet, bring on the Irish!

ScubaSteve
ScubaSteve
7 years ago

@vangrl:

hey vangrl. Yes I don’t mind doing the comparison chart but I need the 2011/2010 stats (which VHB has). I could go back and find them I guess but VHB has them in his spreadsheet. I’ll try and get his attention tomorrow to get him to post them.

mac
mac
7 years ago

@Patiently Waiting: Have you been to Ireland lately? I really think you’re barking up the wrong tree.

mac
mac
7 years ago

@JR: It’s a long answer. The fundamental problem is that the price you sell for your home is private… as in covered by your government-granted Right To Privacy. However, I know what you’re thinking. If it’s private, then how come the real estate cartel has it? And how come agents dole out sold prices discreetly (in a conversation) and not-so-discreetly (in their Virtual Office Website that they sign you up for)?

Well that issue is one of many that the Competition Bureau in Ottawa is looking into. But as for Canadians getting Zillow or Redfin type access to sold prices any time soon, I’m not sure that can happen without a change in the privacy laws.

McLovin
McLovin
7 years ago

That’s a sweet day for sales!

Bo Xilai
Bo Xilai
7 years ago

@Patiently Waiting:

Kenney is personally going to Ireland to recruit his kinfolk.

What’s wrong with recruiting highly qualified immigrants who actually understand and speak one of our official languages? Some of my acquaintances have Masters degrees and waited a year to get jobs in Ireland. I was trying to recruit them like crazy.

I’ll take people with skills and education any day over moneyed tourists as immigrants.

Patiently Waiting
Patiently Waiting
7 years ago

Kenney is personally going to Ireland to recruit his kinfolk.

http://uspolitics.einnews.com/pr_news/117574757/minister-kenney-visits-ireland-to-meet-workers-looking-for-a-chance-to-come-to-canada

Every indication is Kenney is a staunch Roman Catholic (abortion debate is back), and is tailoring the immigration system to bring in firstly Roman Catholics, and secondly Christians in general. Keep in mind, most Churches (including RC) are in decline, and he may feel very strongly about that.

BTW, my ancestry is part Irish Catholic so I have nothing against seeing more here (nor any other group), but I’m just saying I see an agenda for better or worse. Orders are to fill the pews.

JR
JR
7 years ago

@data junkie: “it was a closely-guarded secret.”

I have a question. Why is this legal? Why are “stats” that influence major public and private decisions, that in many cases are backed by the taxpayer, why are these allowed to be so secretive? Why is data regarding the sale of a property hidden from the public for a large amount of time and only assessable by a monopoly organization? Why is something that has such a large impact on the economy not more transparent and regulated by the government?

Patiently Waiting
Patiently Waiting
7 years ago

@patriotz: I’ve been researching the recent changes and I don’t agree. Its only been a majority government since last year, so we’ve only seen the beginning of it.

If anything, I think the changes to our immigration system are more profound than most people realize.

Girlbear
Girlbear
7 years ago

@data junkie: Data Junkie, are you single because I think I am in love. lol. Thanks for your “astonishing” updates to this blog!

Romeo Jordan
Romeo Jordan
7 years ago

Yallie,

great post…we could get close…i do think a bunch of numbknuts will start to jump at the 15-20% declines soon, so sales could head higher as (too) early stage bargain hunters find sellers who hit their stink(s like shit) bids.

could be an interesting month!

the MSM is really turning up the heat now, it’s relentless (at the moment)