FFFA! CMHC! RETIREMENT! LOTTO! RULES!
It’s that time of the week again!
Let’s do our regular end of the week news round up and open topic discussion thread.
Here are a few recent links to kick off the chat:
-CMHC outlived its mandate
-House retirement plan for boomers
-Lottery retirement plan
-Full mortgage rule effect to come
-Start CMHC privatization now?
-Condo market driven by bad math
-Toronto condo halts on plunge
-ICBC sheds staff
So what are you seeing out there? Post your news links, thoughts and anecdotes here and have an excellent weekend!
November 2nd, 2012 at 2:18 am 1
Vote up or down on whether or not Flaherty should freeze the CHMC consumer insurance obligation ceiling now and start auctioning the insurance obligations to private firms.
Flaherty did it before when income trusts were a material and ongoing drain on tax revenue. Income trusts amounted to an accounting trick. They transferred the bonafide CRA tax obligations from companies(partnership type) to individual investors with smaller tax obligations for the benefit of those individuals and to the detriment of other tax payers.
Income trust listings on the TSX surged and festered with all manner of ponzi operators joining the fray. In 2006 he killed income trusts dead, and many complained. Retired people in particular were using the monthly distributions of these risky trust unit stocks to live bigger than they otherwise would on the more prudent fixed income investments like long bonds.
CMHC: Kill it now and use a slaughterhouse hammer!
From: http://fullcomment.nationalpost.com/2012/10/30/jesse-kline-good-reasons-to-start-now-with-cmhc-privatization/
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November 2nd, 2012 at 3:37 am 2
Some interesting commentary on B20 implementation http://www.canadianmortgagetrends.com/canadian_mortgage_trends/2012/11/today-is-b-20-day.html
Hot debate. What do you think?
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November 2nd, 2012 at 4:41 am 3
“One need only look to our neighbours to the south to see the disastrous effect government meddling in the mortgage market can have.”
How about looking right here in Canada? Were you complaining back in 2006 when the Cons brought in the 0/40? Didn’t notice house prices taking off?
“By privatizing the CMHC, the government could reduce the amount of exposure taxpayers have to the mortgage market and prevent any future distortions of the marketplace.”
The Crown cannot assign its obligations. Privatise profits, socialise losses.
“There are also questions about how attractive the CMHC would be to private investors, especially if the government lifts its guarantees.”
Ya think?
The NP is following the same line as its counterparts south of the border – saying nothing while the biggest housing bubble in history unfolded, and then suddenly discovering a problem when an oncoming bust becomes obvious.
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November 2nd, 2012 at 4:43 am 4
@More Data Please:
“Vote up or down on whether or not Flaherty should freeze the CHMC consumer insurance obligation ceiling now and start auctioning the insurance obligations to private firms.”
The Crown CANNOT assign its obligations.
Hot debate. What do you think?
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November 2nd, 2012 at 5:07 am 5
@patriotz: Crown Obligations
Laws can change. Beneficial flow through taxation of income trust partnerships were the law until 2006, when Flaherty announced changes.
Insurance obligations could be sold off with NHA backing that is more adverse than 90%. 80% 70% etc. The contracts are presently making money and they could be sold after 100% backing is withdrawn.
Patriotz, you’ve made this objection before. If it’s more than a theoretical point, please make it clear why you are right. Here’s the legislation:
http://laws.justice.gc.ca/eng/acts/N-11/page-1.html
BTW, in case you want to try that old CSB saw, these aren’t Canada Savings Bonds. These securities are issued by the CMHC, not The Bank of Canada.
Hot debate. What do you think?
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November 2nd, 2012 at 5:19 am 6
@More Data Please:
You cannot “sell” an obligation. An obligation is something you owe somebody else. You cannot make a deal with a 3rd party to escape your obligation.
“these aren’t Canada Savings Bonds. These securities are issued by the CMHC, not The Bank of Canada”
All CMHC obligations are expressly guaranteed by the Crown. Also CSB’s are obligations of the GoC directly, not the Bank of Canada. The obligations of the BoC, like any central bank, are bank notes and deposits it holds, i.e. the monetary base.
http://www.bankofcanada.ca/wp-content/uploads/2012/09/statement_financial_position_310812.pdf
Hot debate. What do you think?
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November 2nd, 2012 at 6:00 am 7
I caught the tail end of a CBC Vancouver news story last night that made it sound like the Vancouver real estate market is on an upswing. They were saying sales were up in October. They were at some townhouse project and boasted how there were 500 pre-sale buyers registered to buy as soon as the units come available. Real estate agents were talking about how sales were great. It was quite a bullish news piece. At one point they had to soften the bull message with the line, “But it is still a buyers’ market.”
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November 2nd, 2012 at 6:01 am 8
@patriotz: Hoping for more.
I concede that it would be difficult to change the rules on the existing CMHC insurance contracts. Going forward however, similar to the phased income trust tax changes, 100% backing could be reduced on new contracts.
Admittedly I was hoping to see how much fear I could create with my initial post. At least two people voted it down before you threw a wet blanket on the CMHC armageddon scenario I was testing.
Nevertheless, phased changes to CMHC backing would still have punishing effects on irresponsible borrowers which, if resulted in counterparty defaults, the effected existing 100% contracts would default to 90% backing as well.
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November 2nd, 2012 at 6:16 am 9
This is the bullish CBC news piece. You guys HAVE to watch this. It starts off with “Perhaps the real estate slump in Metro Van is turning around. Sales were up in October. But is it really a reversal in fortune?”
http://www.cbc.ca/player/News/Canada/BC/ID/2299315929/
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November 2nd, 2012 at 6:39 am 10
@patriotz:
i was under the impression the ‘crown’ can do whatever the hell it wants these days
prorogue, anyone?
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November 2nd, 2012 at 6:41 am 11
@Anonymous:
dude
that little 10sq foot circle of grass that passes for a yard at :29
and of course, the RE fluffer at :34
crazy eyes!
Hot debate. What do you think?
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November 2nd, 2012 at 7:08 am 12
Chastising Canadian households for their high levels of debt is a favoured past time of economists and policymakers in this country. But a new report from BMO Capital Markets argues that more of the chastising should be focused at government debt.
“In the past two years—when the hectoring of households began in earnest—public sector debt has risen much more notably than household debt,” said Douglas Porter, deputy chief economist of BMO Capital Markets.
Canadian government debt has risen much faster than household debt since 2008
http://business.financialpost.com/2012/11/01/canadian-goverment-debt-has-risen-much-faster-than-household-debt-since-2008/
Hot debate. What do you think?
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November 2nd, 2012 at 7:09 am 13
@Anonymous:
Oh no, these realtors don’t look happy and confident.
Hot debate. What do you think?
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November 2nd, 2012 at 7:18 am 14
@patriotz: “The Crown CANNOT assign its obligations.”
The crown can do what ever it wants through legislation.
Hot debate. What do you think?
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November 2nd, 2012 at 7:27 am 15
“B.C. suffered the biggest setback in job loss, while little changed in other provinces in October, according to Statistics Canada.
The federal agency says the number of workers declined in the province by 11,000 last month. Despite the loss, the unemployment rate fell 0.3 percentage points to 6.7 per cent, the agency said, as fewer people participated in the labour force.”
http://www.vancouversun.com/business/economy/loses+jobs+Canada+unemployment+rate+remains+cent/7488623/story.html
Hot debate. What do you think?
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November 2nd, 2012 at 7:44 am 16
@Lotus Lander:
“B.C. suffered the biggest setback in job loss”
I thought Cam Muir said BC was experiencing strong job gains? Didn’t he say that’s one of the reasons by BC real estate prices would go higher?
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November 2nd, 2012 at 7:45 am 17
@Rusty’s Ghost: The mortgage-helpers above the garages (Fonzie Scheme) are only 512 sqft. They are in the middle of nowhere, and it appears there is no parking for the tenant. It must be a forty minute bus ride to the mall bus loop and Westcoast Express. What are these going to rent for? Maybe $500 including internet/cable/heat and a lift to the mall every morning
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November 2nd, 2012 at 8:43 am 18
@Anonymous:
The developer has ~500 names on their mailing list, so the “report” calsl them “prospective buyers”. Hey, I’m too a prospective buyer of many things (if I win a lottery that is)
Hot debate. What do you think?
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November 2nd, 2012 at 8:53 am 19
“The CMHC is also taking on large amounts of debt, to the point where, according to Horlacher, a “0.6% rise in the cost of servicing this debt would completely wipe out net income.”
It should be reasonable to think that any private enterprises (banks, etc) would have financing costs that are >60 bps more than that of the Canadian government (more accurately a crown corp). Thus, does it mean that CMHC is worthless to a private entity as, under a private hand at the current state, won’t be able to generate net income?
Hot debate. What do you think?
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November 2nd, 2012 at 9:03 am 20
@vanpire: I’ve got a phone book therefore I have a list of thousands of prospective buyers for my snake oil!
Hot debate. What do you think?
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November 2nd, 2012 at 9:11 am 21
@vanpire: I think they are overplaying demand to their detriment. If I was in the market for these homes, I might think there is no point in looking at them as they are apparently all spoken for.
But of course, they are not. So I don’t get this marketing strategy.
Hot debate. What do you think?
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November 2nd, 2012 at 9:14 am 22
@Lotus Lander:
Vancouver unemployment rate continues to increase
(despite BC U/E rate dropping)
Apr 2012: 6.2% (7.3% Canada)
May 2012: 6.4% (7.3% Canada)
Jun 2012: 6.4% (7.2% Canada)
Jul 2012: 6.8% (7.3% Canada)
Aug 2012: 6.8% (7.3% Canada)
Sep 2012: 7.0% (7.4% Canada)
Oct 2012: 7.2% (7.4% Canada)
- That’s 1% increase in the last half year, while national U/E rate barely unchanged.
- But of course, U/E data is “noisy”. Will be interesting to keep watching though.
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November 2nd, 2012 at 9:26 am 23
Re: lottery retirement plan
I think they forgot to add gambling to winning the lottery and inheritance as retirement sources.
I laugh so hard every time I hear “Play for fun, NOT TO MAKE MONEY!!!!” at the end of all those BCLC casino commercials
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November 2nd, 2012 at 9:38 am 24
@Patiently Waiting:
we used to go hiking up burke mountain
i drove up their last summer, was pretty horrified – will be another PoCo ghetto
Hot debate. What do you think?
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November 2nd, 2012 at 10:09 am 25
@VMD:
The same thing happened in California just after their bubble topped. The state led the rest of the US in unemployment increases over the next few years:
http://marketwi.se/wp-content/uploads/2010/05/image_thumb9.png
Notice how their UE rate went from 5% to 13% in 3 years. This is what happens after your economy becomes a giant real estate Ponzi scheme. Good thing it’s different here in BC.
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November 2nd, 2012 at 10:10 am 26
@Anonymous: “hey were saying sales were up in October”
There were 7 more sales per working day in October than November, a 9.55% increase over September. Here are the September-October data with %change since 1999:
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November 2nd, 2012 at 10:18 am 27
@VMD
Just wondering where you got the Vancouver UE stats from? That trend lines up with what I’ve been seeing. Other offices in our building have been vacating throughout the year and new companies haven’t been moving in.
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November 2nd, 2012 at 10:25 am 28
And here are October versus November
In the past two years November has been about the same as October. From that perspective the best estimate would be 87 daily sales, 21 sales days is about 1830 sales.
But I am shaving a bit off that cursory estimate because of mortgage issues (see my link in comment #2). November is the start of a much stricter lending environment and my conjecture has been that October has seen a residual sales surge in the advent of these new rules, same as what occurred when rules changed the last few times.
I don’t have high confidence that is what occurred, and many lenders had already changed their lending criteria well in advance of November 1st, but I’m still attributing a 10% surge to this. I would put my bet on November sales to be around 80/salesday, or 1700.
And on the subject of sales there are a few screaming discounts popping up recently in certain areas (that shall remain nameless). These areas, in my view, have been dead men walking for a while now and are in dire need of more capital injections to keep prices high. That injection may come in 2013, but as of right now, it’s not looking good. Remember the last time we said that — the year that shall remain nameless — and the lending taps opened up the following year. The only place I see remaining for capital injections is direct investment, most likely from Asia (mostly China). (This is why I track China’s economy closely.)
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November 2nd, 2012 at 10:26 am 29
@jesse: Oops! “There were 7 more sales per working day in October than
NovemberSeptember”Hot debate. What do you think?
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November 2nd, 2012 at 10:32 am 30
From the Richmond News:
“But recently educators have faced a new challenge: Canadian-born children entering kindergarten with inadequate English skills because they speak a different language at home, said district curriculum coordinator Diane Tijman. Many are the offspring of former ESL students who moved to Richmond from Hong Kong in the 1990s amid uncertainty over the transfer of authority from Britain to China.”
http://www.richmond-news.com/news/programs+rise+Canadian+born+students+Children+often+speak+another/7472668/story.html
I see this is an astonishing failure of Canadian multiculturalism. Canadian multiculturalism has long espoused the mosaic model as opposed to the melting pot model. That is, new immigrants are encouraged to retain the cultural attributes of their home country as opposed to becoming completely assimilated. That said, immigrants to Canada have always been expected to learn the official language–that is why the government pays for ESL training for immigrants. So the fact that we now have second-generation Canadians who do not speak either official language and require ESL in school speaks to an inadequate level of integration of immigrants into Canadian society. This may significantly undermine social cohesion in Canada.
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November 2nd, 2012 at 10:34 am 31
October average is out:
http://www.yattermatters.com/2012/11/eyes-on-vancouver-average-home-price/#more-32252
Thanks Larry.
Detached average is down 9.6% from peak. Will be interesting to see what the HPI says. My prediction is that it will come in around 4.5% down from peak.
Hot debate. What do you think?
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November 2nd, 2012 at 10:36 am 32
@Jessie,
9.55% increase over last month but about 35% below the 10-year average sales for October. With no external shock this market is dropping off very rapidly, it will be scary to think what will happen if something externally to Vancouver/Canada were to happen to either tighten up credit markets further, raise interest rates, or put fear in people. I pray nothing does but with so many possible negative catalysts on the horizon around the world it seems only a matter of time before something “unexpected” hits the world economy. If it does, the rapid declines we’re seeing will turn into a free-fall. I don’t want to see that, would rather see a gradual, 5 year decline. While still painful it’ll be a bit more manageable. It seems to me though that the probability of something major occurring to externally shock the market has been increasing rapidly.
Hot debate. What do you think?
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November 2nd, 2012 at 10:43 am 33
Jesse – is this yours? http://housing-analysis.blogspot.ca/2011/07/more-on-bc-interprovincial-migration.html
I’m running a labour market projection project with the Conference Board right now and didn’t have a good chart that parsed inter-provincial migration by source province… so I shared this with them. If you did this, thanks! (attribution cited) Interestingly the CBoC’s recent models assume about 3,000/year net interprovincial (in)migration to BC for 2010-2015 and I can’t see for the life of me how they could be so bullish – unless the trend turns around REALLY quickly we’ll be nowhere near those levels…I think we’ll be negative for the period or flat at best, as we “went negative” (unlike Adrian Dix!) in Q1 2011.
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November 2nd, 2012 at 10:53 am 34
@Anonymous:
Canadian multiculturalism?
Multiculturalism has morphed into government-sanctioned ethnic ghettos.
Hot debate. What do you think?
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November 2nd, 2012 at 10:53 am 35
@ArthurFonzarelli: Yes, that was mine, glad it was of use!
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November 2nd, 2012 at 10:57 am 36
Hidden due to low comment rating. Click here to see.
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November 2nd, 2012 at 11:05 am 37
@Groundhog: “the probability of something major occurring to externally shock the market has been increasing rapidly”
If you believe Michael Pettis, the “external shock” by way of cratering hard commodities and slower GDP growth in China will occur before 2015. That’s something the likes of Central1 and other BC-focused economists cite as risks. If Pettis is right and a drop in commodity prices/vols (and a concomitant crunch in remittances from investment-led nations) is near certain, local economists’ estimates for BC’s economy are way too optimistic.
The shocking thing is how little attention local economists have paid to the large risks posed by a China rebalancing, especially for Vancouver. Either they have discussed it behind the scenes and aren’t making their views public, or they whiffed. I’m not economist but I read some who are sounding the alarm and have some decent arguments to back it up.
Hot debate. What do you think?
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November 2nd, 2012 at 11:09 am 38
@Groundhog:
http://www.statcan.gc.ca/pub/71-001-x/2012010/t015-eng.htm
This is releaseed monthly.
CBC news also publish an unemployment rate map every month, containing U/E rate of major cities as well.
(I see on the link it now says 7.2% U/E rate for Vancouver in Sept too. Unless CBC/I was mistaken, it was 7.0 when initially reported last month. Maybe it was revised up this month)
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November 2nd, 2012 at 11:24 am 39
@Anonymous: For years, the federal government has been scaling back immigration from China specifically because of the problems with language. The policy of increasingly favouring English/French-speaking immigrants over others has been in place for many years now.
In 2005, China was the source for 42K new permanent residents. In 2011, that fell by 33% to 28K. Most years in the mid-2000s had China in the mid-30ks and now it is in the upper 20Ks.
Meanwhile, the Phillipines had a huge increase from 11K in 2002, to 17K in 2005, to 35K in 2011. Filipinos tend to speak fluent English.
India has fallen a bit, but not nearly as much as China.
Parents who don’t give their children the gift of the English language are only hurting them, as they risk being marginalized in the future.
Contrary to popular wisdom, China isn’t taking over the Lower Mainland. Also, consider that Chinese immigration, like many others, is spreading out more across the country. And the federal government is becoming even more insistent on immigrants speaking English/French.
Just the facts.
http://www.cic.gc.ca/english/resources/statistics/facts2011/permanent/10.asp
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November 2nd, 2012 at 11:34 am 40
@Anonymous:
So what? They can’t speak english when starting Kindergarten. In about 6 months or sooner they will be fluent. I encourage the families to keep speaking their languages at home. My uncle and auntie can still barely speak english, but my cousins have perfect english.
My parents freaked out when my brother and I couldn’t speak english when starting kindergarten, and started speaking only english with us. Now I can barely speak Chinese.
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November 2nd, 2012 at 11:39 am 41
Also look at these figures on language ability of immigrants. Huge changes for the better in the last ten years.
http://www.cic.gc.ca/english/resources/statistics/facts2011/permanent/13.asp
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November 2nd, 2012 at 11:40 am 42
@Groundhog: I don’t want to see that, would rather see a gradual, 5 year decline. While still painful it’ll be a bit more manageable.
Why would that make it more manageable? Wouldn’t that be the equivalent of ripping the bandaid off s-l-o-w-l-y?
In my mind a rapid crash that brought prices in line with fundamentals would be healthier for our economy because we could get to a normal economy quicker. Lets shake out the waste now and hopefully start growing a local economy based on productivity instead of a pyramid scam sales transaction based debt economy.
Hot debate. What do you think?
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November 2nd, 2012 at 11:46 am 43
jesse: “If you believe Michael Pettis, the “external shock” by way of cratering hard commodities and slower GDP growth in China will occur before 2015.”
with 85% of export to US I would be more worried about external shocks from south of the border. nothing changed since 2008 crisis in terms of bank regulations.
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November 2nd, 2012 at 11:47 am 44
Spot the fatal flaw:
http://www.vancouversun.com/news/todays-paper/There+cracks+boomer+nest+eggs/7480940/story.html
You know that time you did a complicated math problem spanning several pages, reaching a brilliant proof, only to have some guy find an error in one of the initial steps that makes the rest of the logic moot?
Like that.
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November 2nd, 2012 at 11:52 am 45
@star wars: “with 85% of export to US I would be more worried about external shocks from south of the border”
I wouldn’t. In my view the US faces risks mostly from external, not internal, factors save the upcoming fiscal issues early in 2013. If anything I would bet on resource demand relating to US construction increasing. It just won’t be of the magnitude that China has been sucking resources in the past decade.
There are always risks in the US but I see the risks in Asia as much higher right now. Vancouver in particular will feel the hit more because of an increased prevalence of direct family and economic ties to Asia.
Hot debate. What do you think?
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November 2nd, 2012 at 12:08 pm 46
@Patiently Waiting: “China isn’t taking over the Lower Mainland.”
Quite, but is seen as “taking over” certain neighbourhoods that are consuming most of the chatter on this blog. Immigration from China, Hong Kong, and Taiwan amount to about 23% of all immigrants. These data are from Q2’12. Note non-permanent residents who subsequently are granted PR status are not included in these numbers (Net NPR in Q2’12 was about 3000):
Hot debate. What do you think?
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November 2nd, 2012 at 12:37 pm 47
@jesse:
Thanks for the data!
This site has been mentioned on this blog.
I wonder if the data for each neighborhood are accurate or make sense:
http://www.blocktalk.ca/vancouver/point-grey/lifestyle/
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November 2nd, 2012 at 12:47 pm 48
http://www.vancouversun.com/business/Cant+afford+vancouver+housing+move/7354789/story.html
Really bad one-sided view on housing – you have to buy so keep moving out until you can afford it – Isn’t that what created the dreaded suburbia?
Or instead of moving, maybe you could just RENT (what a novel concept!
Hot debate. What do you think?
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November 2nd, 2012 at 1:06 pm 49
Quick SFH stats summary (vs Oct 2011):
Van West
Sales: -13%
S/L Ratio: 46% vs 41%
HPI: -7.7% (-6.5%，-3.7%，0%) (YoY % change gradually worsening x last few months)
Median: -1.7%
Richmond:
Sales: -25%
S/L Ratio: 38% vs 49%
HPI: -4.0% (-4.2%,-3.7%,-3.9%)
Median: +3.8%
Burnaby:
Sales: -40%
Ratio: 41% vs 66%
HPI: +2.4% (+4.2%,+5.2%,+3.9%)
Median: -5.5%
Van East:
Sales: -26%
Ratio: 43% vs 63%
HPI: +1.9% (+3.2%,+4.8%,+5.5%)
Median: -1.5%
Coquitlam:
Sales: -20%
Ratio: 49% vs 51%
HPI: +2.8% (+3.6%,+3.7%,+4.3%)
Median: -2.7%
If this trend continues, all areas will have negative YoY HPI prices in a couple months.
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November 2nd, 2012 at 1:22 pm 50
@airborne canine: Actually I liked that article but, like most Sun pablum, misses the point: Vancouver, even without a bubble, is pricing in higher density than is currently available. Maybe that’s unpopular but that’s what’s been happening for over a generation now.
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November 2nd, 2012 at 1:56 pm 51
@Veni Vidi Vci “In my mind a rapid crash that brought prices in line with fundamentals would be healthier for our economy because we could get to a normal economy quicker.”
You may be right, except I don’t think the housing market will have a rapid crash without something terrible happening which would affect all parts of the economy equally bad. I would rather something terrible does NOT happen, and housing falls 40% or so over around a 5 year period. Yes, it will affect a lot of industries and it will be painful for everyone, but I don’t think it would be as bad as a quick drop.
If we could have housing rapidly drop on its own to its bottom over the next year and then carry on with life in a “normal” economy, then that would be preferable, but unfortunately I don’t think that’s a possibility.
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November 2nd, 2012 at 2:01 pm 52
@ Jesse re: Michael Pettis
Yes I think his views are correct. Looking back on history I am not sure that it’s ever happened that a country has risen from the lows that China was in to becoming a world superpower without a few depressions along the way.
Even the US, who had a pretty rapid rise, suffered more then 1 depression and many recessions. More recently the USSR, and Japan were in similar positions as China. It is not too long ago everyone was talking about Japan buying up all the US real estate and companies.
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November 2nd, 2012 at 2:13 pm 53
@Groundhog:
“If we could have housing rapidly drop on its own to its bottom over the next year and then carry on with life in a “normal” economy, then that would be preferable, but unfortunately I don’t think that’s a possibility.”
It’s not only a possibility, it would be a certainty if the federal government simply stopped insuring mortgages.
But we all know that they want a “soft landing”, which is the worse thing that could happen economically.
Hot debate. What do you think?
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November 2nd, 2012 at 2:25 pm 54
@patriotz:You cannot “sell” an obligation. An obligation is something you owe somebody else. You cannot make a deal with a 3rd party to escape your obligation.
Tell that to ‘Knuckles’ who lives around the corner from me in East Van.
Hot debate. What do you think?
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November 2nd, 2012 at 2:29 pm 55
@patriotz: Maybe the feds should get out of the RE business by ridding us of CMHC, but have the province dive in with higher PTT. Just sayin’.
Hot debate. What do you think?
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November 2nd, 2012 at 2:34 pm 56
Larry’s upbeat again with another ‘stats don’t lie’ headline. Despite the stats also being the 2nd worst since 2001 according to VHB.
http://www.yattermatters.com/2012/11/vancouver-real-estate-stats-dont-lie-4/
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November 2nd, 2012 at 2:35 pm 57
“It’s not only a possibility, it would be a certainty if the federal government simply stopped insuring mortgages.”
Simply not going to happen. If they somehow decided to stop insuring mortgages, they would gradually get out.
I’m not saying there aren’t possibilities that the RE market rapidly crashes, I’m saying the circumstances that would cause that are not something I would like to see happen.
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November 2nd, 2012 at 2:39 pm 58
@jesse: Good for you, Jesse. At least you see it.
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November 2nd, 2012 at 2:48 pm 59
@jesse: You are on fire today, my man. You’re like a one-man China inflow-capital-migration data machine! I don’t know where all the China bulls and Racist-Labellers are? They must have gone away for the weekend.
Hot debate. What do you think?
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November 2nd, 2012 at 2:59 pm 60
@Anonymous:
Technically that is correct. That is called a sovereign default.
What do you think the outcome would be for the RE market, the banking system, and the economy in general? Note that not even Greece has got to that point yet. Check out other countries that have.
Hot debate. What do you think?
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November 2nd, 2012 at 3:00 pm 61
@Groundhog: ” It is not too long ago everyone was talking about Japan buying up all the US real estate and companies”
I remember being told the future was to learn Japanese for business reasons, now it’s learning Mandarin.
Movies to look for in the 99 cent bin for some weekend watching: Gung Ho and Rising Sun.
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November 2nd, 2012 at 3:02 pm 62
VMD I updated the price prediction contest tracking chart. Two months to go! It’s going to be a nail-biter
Hot debate. What do you think?
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November 2nd, 2012 at 3:55 pm 63
According to Roubini, better learn Hindy and Indonesian.
Hot debate. What do you think?
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November 2nd, 2012 at 3:56 pm 64
Oops, Hindi of course
Like or Dislike:
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November 2nd, 2012 at 4:19 pm 65
4 Propane Tanks strapped together were placed on Skytrain Tracks near Scott Road Station!!! Skytrain service shut down at all Surrey stations.
http://www.cbc.ca/news/canada/british-columbia/story/2012/11/02/bc-skytrain-halted-propane.html
Hot debate. What do you think?
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November 2nd, 2012 at 4:21 pm 66
Victoria’s not doing very well. Not a single up arrow. No October sales spike over September either.
Hot debate. What do you think?
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November 2nd, 2012 at 4:36 pm 67
Hidden due to low comment rating. Click here to see.
Poorly-rated. Like or Dislike:
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November 2nd, 2012 at 5:08 pm 68
@Anonymous:
Dude, this is a real estate blog, not a xenophobia blog.
Hot debate. What do you think?
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November 2nd, 2012 at 5:16 pm 69
New Listings 157
Price Changes 103
Sold Listings 75
TI:17712
OCT stats release here: http://www.paulboenisch.com/REBGVStats.ubr
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November 2nd, 2012 at 5:27 pm 70
@paulb: Another very bullish day… lol!
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November 2nd, 2012 at 5:28 pm 71
Well-loved. Like or Dislike:
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November 2nd, 2012 at 5:30 pm 72
November past years
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November 2nd, 2012 at 5:47 pm 73
Canada may have added 1,800 jobs in October, but that number hides the fact that almost all the gains came from government and that the private sector lost more than 20,000 jobs.
The 1,800 jobs added was already a disappointment compared with the 10,000 economists had forecast. According to Statistics Canada, that left the unemployment rate unchanged at 7.4%.
The six-month average for jobs gains is now 29,400, according to Reuters. But it’s a very different story when you look at the private sector and public sector separately.
“Details of the report were much worse than the headline number with the private sector showing a loss of 21,000 in October, the fourth decline in six months,” said Matthieu Arseneau, senior economist with the National Bank of Canada. “Over the period, the private sector is actually showing a loss of 12,000 jobs, compared to a surge of 76,000 jobs in the public sector.”
http://business.financialpost.com/2012/11/02/employment-numbers-hide-the-fact-canada-is-bleeding-private-sector-jobs/
Hot debate. What do you think?
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November 2nd, 2012 at 6:23 pm 74
Global sure was bearish tonight.
Back to back pieces full of real estate negativity, even proclaiming the pre-sale market to be “dying”.
Ian Watt featured, he was pretty negative on pre-sales as well.
Just another day in the life of a meltdown.
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November 2nd, 2012 at 7:30 pm 75
@ Best place on meth:
Global was bearish? Strange,the Sun’s saying sales are “soaring”.
“Metro Vancouver home sales soar by 27.4 per cent in October; year-over-year decline”
http://www.vancouversun.com/business/real-estate/Greater+Vancouver+home+sales+soar+cent+October/7489336/story.html
Then again the Globe says:”Vancouver home prices sink 3.4% from peak as sales plunge”
http://www.theglobeandmail.com/report-on-business/top-business-stories/vancouver-home-prices-sink-34-from-peak-as-sales-plunge/article4860841/
Soaring, sinking, plunging? We know who’s side the Sun is on.
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November 2nd, 2012 at 8:07 pm 76
Today I read the Courier’s real estate saga on “Elaine L” and her mother, who are in the market for a million dollar house (with basement suite!) She fired her realtor (he didn’t tell me the market is dropping and it’s a buyer’s market now!), and now has a new realtor (who is “doing his job like a real realtor”-as opposed to the previous poser I guess). Anyway, she’s still looking for her million dollar shack in East Van (hopefully with no rats in the basement). I’m still waiting for the piece when “Elaine L” throws in the towel and decides renting is much better bang for the buck. Will it happen? Guess I’m dreaming when this piece is brought to us by http://www.rew.ca :s
Hot debate. What do you think?
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November 2nd, 2012 at 8:14 pm 77
“According to Roubini, better learn Hindy and Indonesian.”
Why bother? The rest of the world is busy learning English (albeit of various globalized varieties).
Hot debate. What do you think?
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November 2nd, 2012 at 10:42 pm 78
Today’s news from Victoria;
“Condo Development Numbers Grow While Sales Shrink”
http://www.youtube.com/watch?v=aEXe8kZtnIs
Hot debate. What do you think?
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November 2nd, 2012 at 11:26 pm 79
#52 @Groundhog: “Even the US, who had a pretty rapid rise, suffered more then 1 depression and many recessions. More recently the USSR, and Japan were in similar positions as China.”
Also, the industrial competitors of the US were invaded and/or bombed over two world wars. Crazy times.
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November 3rd, 2012 at 12:00 am 80
@southseacompany:
Re: the sun/province/georgia straight and any of our local ‘life style’ rags that double as RE boiler plate
it will only become more glaringly obvious!
Hot debate. What do you think?
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November 3rd, 2012 at 12:53 am 81
Here’s the video from glogal BPOM is talking about
http://www.globaltvbc.com/video/condo+presales/video.html?v=2300018376&p=1&s=dd#video
Glad Ian Watt is calling the market what it is, about people flipping pre-sale contracts as a scam.
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November 3rd, 2012 at 2:18 am 82
@logic:
” The rest of the world is busy learning English (albeit of various globalized varieties).”
Exactly. Even in Asia alone, the economic clout of people who speak English is vastly greater than for speakers of any other language.
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November 3rd, 2012 at 8:11 am 83
Toronto existing home sales down 7.1 per cent in October
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November 3rd, 2012 at 9:04 am 84
Check out this Rare Find property:
3929 Capilano Road
Oh wait a second, is it really that rare if your neighbor with the exact same odd 1/2 acre property is also for sale:
3943 Capilano Road”
Check out the picture, 3943 and 3929 are both right next to each other and have the same “Rare find” 1/2 acre death trap lot on the edge of the river cliff:
Lot Layout Pic
I personally love how the second property is such a piece of $hit that they include no pictures of the house for this “Partially finished” property that was started in 1977. These guys don’t deserve $1,250,000, maybe closer to $250,000…greedy fux!
Hot debate. What do you think?
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November 3rd, 2012 at 9:14 am 85
Ohhh, here’s another used house salesperson using all their grey matter to write copy for non-selling homes:
Shaughnassy Style
The only thing Shaughnessy Style about this place is that it is overpriced and not selling. Seriously salespeople, at least get your spelling correct: Shaugnessy not Shaugnassy.
Though, perhaps that’s a new term: Wow, that girl is so Shaugnassy!
Hot debate. What do you think?
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November 3rd, 2012 at 9:24 am 86
@YLTNboomerang: I believe it’s spelled Shauuuuuughnessey
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November 3rd, 2012 at 9:29 am 87
Sorry for all the comments in a row, but there are just some gems out in Edgemont Village in North Van right now.
I posted a few weeks back about how developers have been snatching up all the sub $1M very livable houses in this area and building monster homes in their places without much success of sales (recall the free food ad?). Anyway, here is the latest one and clearly the developer is getting nervous with all the competing inventory out there and is offering incentives to pre-purchase…didn’t he see Ian Watt on Global last night? ha ha:
3959 Lewister Road
This was originally listed in September 2011 for 988,000 as a nice little 1681 sqft bungalow that is now going to be a $2,750,000 4567sqft monster (I bet the 4567 was just randomly generated as they don’t know what they are going to build and probably freaking out or why would they offer this in the copy:
PRE-COMPLETION SALE DISCOUNT OF $100,000 FROM LIST PRICE TILL NOVEMBER 30, 2012 BY DEVELOPERS, PRICE INCLUDES HST. (All caps in ad)
Umm, what’s with the discount BTW, trying to hold the average price up so as not to lower the market value of the other monster sawdust houses you have thrown up in the past year???
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November 3rd, 2012 at 9:53 am 88
@YLTNboomerang: WTF, I would have at least expected that home to be *in* Shaughnessy. But it’s in North Van next to Hwy 1!
Hot debate. What do you think?
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November 3rd, 2012 at 10:02 am 89
And the mighty shall fall:
The Erickson
When Concord Pacific pre-sold the Erickson building, it was to be the most iconic building in Vancouver (a blatant rip off of the Turning Torso unfortunately) and was therefore sold at a premium $/sqft to other buildings at the time. I have the numbers somewhere but recall that some were approaching the $1000/sqft number. The above unit, staged in all it’s un-lived-in flipper mightyness is listed at a still out to lunch price of $928/sqft but is definitely in money losing territory (not including having $2M tied up for 5 years, massive strata fees @ $1339 for 2 years, property taxes and closing/flipping fees). Sucker!
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November 3rd, 2012 at 10:28 am 90
Regarding The Erickson:
The original sale prices were in the range of $1,450 psf to $2,200 psf. The townhouse shown in that listing is arguably the worst unit in the building, fronting on the street, north facing and without direct access to a private garage, which about 1/2 of the townhouses in that building boast. There have been few re-sales in the building because of ridiculous pricing.
My nomination for most outrageous attempt to flip is still Three Harbor Green, where there are 7 units listed for prices starting just above $5,000,000 (V971532, V973275, V972917, V972419, V974510, V888573 & V975806). The cheapest is obviously a flip and the other 6 are for sale by the developer, which means there are probably 10 units unsold. A lot of unsold expensive inventory to hold.
Hot debate. What do you think?
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November 3rd, 2012 at 10:39 am 91
@UnagiDon: Exactly! Edgemont used to be a sleepy hollow in North Van where even during the run-up, houses were all sub $1M. It is only in the past 2-3 years that it has gone nuts with developers snapping up all the old character houses to build monsters. I am from NVan originally and had intended in moving back to Edgemont at some point in the future (when it’s time to settle with kids) but will change that plan if the area loses its character will all the spec monsters.
I expect Edgemont will return to normal and these albatrosses will remain as icons to remind us of what a bubble does.
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November 3rd, 2012 at 10:50 am 92
@RFM: Yea, Harbour Green is a joke, V968688 is priced at $1217/sqft. I only track townhouses in Van as I sold mine back in 2007 but have seen lots of the HG stuff come on and off at unreasonable prices since it was built. I sold my TH for $1,650,000 in 2007 and it sold again last year for $1,651,000. The strata fees were killing me at $798 when I left; I can only imagine what they are now as I was on Strata council and the building was horrendously underfunded but the offshore owners (represented by Concord Pacific) had enough votes to kill every increase we put forward.
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November 3rd, 2012 at 11:02 am 93
Auction of “tax sale” property
- anyone knows more about this? Currently 65 active units for bidding
Successful bidders are required to:
1.Provide their driver’s licence or BCID Card with their full name and current address.
2.State their occupation.
3.Provide their Social Insurance Number.
Making payments
Successful bidders must secure their bid by paying the upset price.
If the property is not redeemed by the end of the redemption period (one year after the auction) the successful bidder must pay the surplus bid amount within 30 days.
The next tax sale date is 7 November 2012
http://vancouver.ca/home-property-development/auction-of-tax-sale-property.aspx
Hot debate. What do you think?
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November 3rd, 2012 at 11:34 am 94
According to the REBGV (http://www.rebgv.org/about-rebgv) currently there are more than 11,000 realtors in the lower mainland of BC.
According to the Monthly Statistical Report for October 2012 there were 1,931 sales of all types of residential property during the month.
Assuming 10% of those sales were ‘double ended,’ where the same realtor ‘represented’ both the buyer and seller (real professionals, like lawyers, would NEVER be able to get away with that), the number of sales commissions payable for September would be: 193 to realtors who ‘double ended’ and 1,738 split between two realtors (3,669 commissions). Further assume that 10% of the split commissions were ‘earned’ by high-production realtors who handled multiple sales. Then, the number of realtors receiving commissions for sales during the month would be 193 + 3,302 = 3,495.
So, 3,495 realtors receiving commissions and over 11,000 realtors means that over 7,505 did not receive a commission for October (68%), which is a slight improvement over the 74% who did not receive a commission in September.
No income + continuing overhead and expenses = ads on craigslist to take over lease payments on a ‘barely used to carry potential buyers to open houses’ Mercedes Benz E350?
Bottom line: lots of people needing income didn’t receive any; again, for the xth month in a row.
Now, not only can you buy a property at a lower price, but you can get a nearly new car for a great price too!
Party on Wayne! Party on Garth!
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November 3rd, 2012 at 12:04 pm 95
“Open House Sun. Nov. 4th, 1-4pm. Homemade cookies too!” V969911
We’re going to have set up a “free snacks” index soon.
Hot debate. What do you think?
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November 3rd, 2012 at 12:14 pm 96
Canada Housing Slump: Flaherty’s New Mortgage Rules A Scapegoat For A Much Bigger Problem
But I don’t agree with the ending:
Who opened the doors wide in the first place?
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November 3rd, 2012 at 12:22 pm 97
@VMD: 7 November 2012 CoV Tax Delinquent RE Sales
The upset amount payed on 8 November receives interest rate of 6% for up to one year. This is a decent yield. Does anybody have experience with these?
Surely, there are many properties deleted from the auction at the last minute?
Even properties “sold” at auction are likely to be redeemed by owner before 1 year is up.
What percentage of properties actually transfer title after 1 year? Has it ever happened?
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November 3rd, 2012 at 12:23 pm 98
@YLTNboomerang: The “phenomenon” of older houses being knocked down with new monsters being built is not exclusive to Edgemont Village. Other areas of NV are seeing it too.
On Osborne Rd (upper Lonsdale) there are four new monster houses that have been built over the last year. One has sold (about $1.7m) and the other three have not. Two were built be the same person. He now lives in one and the other one is empty and has been for quite some time. He was asking about $1.8m and now when I walk by only the lights in the bedrooms are one. These two are no longer on the market.
The newest of the four is still for sale with an asking price of $2.15m. Good luck with that. It’s also the smallest of them all and on the smallest lot. Oh ya, it’s on a bus route too. I think for $2m+ I would expect a little more quiet and a view.
In the central Lonsdale area (Chesterfield and 19th) there are two brand new three unit townhouse developments. None of the units have sold as of yet which is about 3-4 months post completion. Originally, they ranged from $879-899k on one side to $949-999k on the other. Prices have dropped to $779-789k and $798-850k. This is a grand total of about $750k in price reductions for the six units. I think that there will be further discounting before these are sold.
Not a good time for new builds for sure.
Hot debate. What do you think?
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November 3rd, 2012 at 12:26 pm 99
@More Data Please:
someone just posted this reply:
“been watching these kind of auction for years due to my job, never had a single one got sold this way, either owner or undertaker will make the payment within the time frame. your money will get refund, but there will be some admin cost that city charges and you will not get back. end of the story is you are playing yourself with your own money. “
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November 3rd, 2012 at 1:06 pm 100
@Anonymous: Yup, speculation is killing so much neighborhood character all around the lower mainland. Regarding Osborne, what block as I lived in the big corner house at Osborne and St. George’s for some time…hopefully that character home didn’t get knocked down as it was a neat place.
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November 3rd, 2012 at 1:10 pm 101
@YLTNboomerang: “had intended in moving back to Edgemont at some point in the future (when it’s time to settle with kids)”
I admit NV is one of the most family-friendly enclaves in Metro Vancouver. But what about your plan to move south? Why pay $2m in NV when you can pay less than half that in Seattle, Portland, San Diego, some parts of the Bay Area, and some upscale LA suburbs? I enjoy vicariously hearing of Vancouverites heading down south, as I’m not currently in a position to pull the trigger myself.
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November 3rd, 2012 at 2:19 pm 102
Your beautiful and I love you.
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November 3rd, 2012 at 2:36 pm 103
@More Data Please:
“What percentage of properties actually transfer title after 1 year? Has it ever happened?”
Certainly, in the 1930′s. Since then, unlikely, since no owner (or lender if the property is mortgaged) is going to let a property go just for the back taxes.
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November 3rd, 2012 at 3:03 pm 104
Re North Van Monster Houses
OK so they start with a lot at 1 million then add a 4500 sq ft house and end up at 2.75 million. How much does it cost to build a 4500 sq ft house? 1.75 million seems more than a little steep. Anyone know what the going rate for SFH construction is.?
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November 3rd, 2012 at 3:48 pm 105
@Anonymous:
building cost in Vancouver was approx $200/sq.ft (a couple years ago)
According to Chinese forums
Hot debate. What do you think?
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November 3rd, 2012 at 4:10 pm 106
@VMD:
Wow, didn’t realize municipal government could deviate so far from the Local Government Act. I thought tax sales were only held in September, boy was I wrong.
“Local Government Act
[RSBC 1996] CHAPTER 323
Part 11 — Annual Municipal Tax Sale
403 (1) At 10 a.m. on the last Monday in September, at the council chambers, the collector must conduct the annual tax sale by offering for sale by public auction each parcel of real property on which taxes are delinquent.
(2) If the last Monday in September is a holiday, the tax sale must instead be held on the next Monday that is not a holiday.
(3) The collector may adjourn the tax sale to the same hour on the following day, and from day to day until each parcel is disposed of.
(4) The collector may act as auctioneer at the tax sale.
(5) The collector may also offer for sale at the tax sale the other improvements on the real property that are taxable under this Act or the Community Charter and on which taxes are delinquent.
(6) A sale under subsection (5) must be in accordance with section 252 [recovery of taxes by the legal remedy of distress] of the Community Charter.
(7) The sale of real property under this section is not a bar to a sale under section 252 [recovery of taxes by the legal remedy of distress] of the Community Charter.”
Source, (and further raw info on tax sales in BC): http://www.bclaws.ca/EPLibraries/bclaws_new/document/ID/freeside/96323_15
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November 3rd, 2012 at 4:11 pm 107
For a medium quality wood-frame single-family house, a construction cost of approximately $250-300 psf would cover everything but lot acquisition. This cost would not include demolition of any existing structure or any remediation work required, but would include all foundation, construction, final finishing, appliances and landscaping. Add more money for higher-level finishing, additional foundation work required for challenging sites, etc. See, e.g.: http://jaybanks.ca/vancouverrealestatenews/2012/03/22/home-construction-costs-vancouver/
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November 3rd, 2012 at 4:20 pm 108
@VMD:
I’ll follow up by saying this about tax sales:
It is extremely rare to ever get the property, the owner and anyone who has a legal interest in the property, (mortgage, lien etc.) Could potentially pay the upset price at any time. The interest rate is set (3?) times a year, (however, it’s stayed at 6% for the last two tax sales, (it used to be higher))
Do a title search before you bid on a property to reveal if there are any government liens on the property. Mortgages and any other outstanding claims on the property are void after the one year redemption period and do not carry over to you, the tax sale purchaser. However, the same is not said for government liens. So if the owner didn’t declare capital gains from rental income from their mortgage helper, lookout!
The City of Van seems to do it a little differently, however, as they don’t require you to forward the entire bid to be held in trust. Instead: they only seem to be requesting the upset price. This may cause the winning bids to come in higher than other municipal tax sales as the bidder is not required to front the entire amount then and there.
(also, quite frankly: Check the properties in person, their condition may not be to your liking.)
Do it for the 6%, not for the house – it’s unlikely you’ll get it. But be careful, (but not fearful) of red herring houses and their government liens that might fall into your lap.
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November 3rd, 2012 at 4:23 pm 109
$200/sqft builds a very nice home and I’d be surprised if many if the new homes listed now were over $150/sqft cost to build.
Hot debate. What do you think?
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November 3rd, 2012 at 4:38 pm 110
Excuse my ignorance, but if houses cost $150-300 sq feet to build. Why do houses in Surrey average $500-700,000 for a 2500-3500 sq foot house?
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November 3rd, 2012 at 4:43 pm 111
@Clockbike:
“Wow, didn’t realize municipal government could deviate so far from the Local Government Act.”
CoV is governed by the Vancouver Charter:
Vancouver Charter
You might find Section 190.1 interesting, guess when it was added and why.
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November 3rd, 2012 at 4:45 pm 112
@T:
“Why do houses in Surrey average $500-700,000 for a 2500-3500 sq foot house?”
Because that’s what someone is willing to pay for them.
I think the question you really wanted to ask is what accounts for the amount of the price over construction costs. Answer is the lot.
Hot debate. What do you think?
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November 3rd, 2012 at 4:47 pm 113
@patriotz:
Sorry, correct link
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November 3rd, 2012 at 4:53 pm 114
Wondering why some neighborhoods in Van West and West Van are so quiet? Here is part of the answer…
Families of ‘naked officials’ remain secluded in overseas communities
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November 3rd, 2012 at 4:56 pm 115
Nothing new to report, but hree are some good snarky words anyway:
http://www.eurasiareview.com/03112012-canadas-housing-bubble-springs-a-leak-oped/
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November 3rd, 2012 at 6:55 pm 116
@Makaya: So “corrupt officials” prefer West Van. So… who’s moving into Van West?
Hot debate. What do you think?
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November 3rd, 2012 at 7:02 pm 117
@jesse: read again: “One such area”…
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November 3rd, 2012 at 7:04 pm 118
Olympic Village news…
$370,000 price reduction for immediate sale!!!
Ouch…
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November 3rd, 2012 at 7:06 pm 119
@Makaya: Van West isn’t exactly an enclave void of Chinese Canadians, and hasn’t been for a generation.
Hot debate. What do you think?
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November 3rd, 2012 at 7:19 pm 120
@Makaya:
Assessed price is $691,000 so still overpriced..
http://www.ecorealtyinc.ca/listing?id=259799386
I wonder if the original purchase price was really $1.1M, or could Pino & Rennie be BS’ing.
Hot debate. What do you think?
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November 3rd, 2012 at 7:42 pm 121
@jesse: the only family I personally know that fits the description of this article lives in Van West.
Van West is not an enclave void of HAM either…
Hot debate. What do you think?
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November 3rd, 2012 at 8:07 pm 122
@VMD: “I wonder if the original purchase price was really $1.1M, or could Pino & Rennie be BS’ing.”
It would have been at the price a few years ago. I looked at places there priced at 1.2 million and they were not as nice as this place.
The maintenance fees for this 1000 ft place are $670 per month! That is for a brand new building! Most new buildings get big increases about 4 to 5 years in. Right now it is almost $1000 per month for maintenance and taxes. I assume all the Village maintenance fees are this high. No wonder these places can’t sell.
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November 3rd, 2012 at 8:45 pm 123
http://www.france24.com/en/20121104-chinas-new-leaders-face-emboldened-critics
Hot debate. What do you think?
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November 3rd, 2012 at 11:58 pm 124
@jesse:
ah, just like “Yaaaaaaaaletown” (followed by an obligatory nose sniffle/wipe)
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November 4th, 2012 at 12:08 am 125
@WagTheDog:
what about my beautiful? you’d better stay away from my beautiful – it’s mine.
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November 4th, 2012 at 12:18 am 126
@RFM:
VMD quoted $200 sq/ft – please explain your math
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November 4th, 2012 at 12:20 am 127
@T:
in surrey? it’s the land! the whole world wants to live in surrey, stupid – or did you miss that memo?
Hot debate. What do you think?
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November 4th, 2012 at 1:03 am 128
That’s what I mean, how can it cost more to build a house in Vancouver than buy property in the suburbs. Unless the build cost includes land, which is sort of pointless because most people pay for the land and than find the builder.
Hot debate. What do you think?
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November 4th, 2012 at 4:06 am 129
@T:
well, the trick is to hire a crooked builder who speaks your language, someone who employs a bunch of unlicensed, poorly trained, possibly illegal workers to do shoddy work with re-constituted wood products, gypsum, and then slap some granite counter tops on it – call it ‘exclusive’ and mention the words ‘prestige, prestige, prestige’ in the development brochure.
that probably doesn’t answer your question – and at this stage, i don’t care – the city is ruined, let this fucker pop so we can assess the damage (and see who’s swimming sans trunks)
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November 4th, 2012 at 8:29 am 130
@UnagiDon: We’ll see what goes down during my annual review…plus I have to convince the better half. Step one is taking the wife on a couple Texas trips.
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November 4th, 2012 at 9:59 am 131
Intresting conversation i had with a realtor reagrding this add:
http://vancouver.en.craigslist.ca/rds/reb/3373317267.html
ME:You fail Econ #101.Explain to me how this is a “great investment” with an 1800/per month mortgage and strata/tax.You can get what 800-1000 rent.Looks like im losing 800 per month,do me a favor please dont get into any job that requires basic math.
HIM:No one said to purt $0 down and have a inflated mortgage!!
Check your math before you question that is much qualified than you are!!
ME:You havent shown me your math either do you have one of those special calculator that most speculators carry?Or is it the realturd one?even with a 20% downpayment you still wont break even.
HIM: With 20% down you have a mortgage payment of $925/ mo
The place was rented at $975 prior
Notwithstanding, as the area develops, market rents will only climb. Besides, this is not only potentially passive cash flow opportunity but will also yield capital gain..
Bet no one riddled you these facts!
ME:Ok we did the math ..and here it is 278k – 20%(DP$55,600)=222,400 @3.09% 5yr fixed =25 yr monthly payment is 1,073..Property tax ..lets say 1200..so add another 100 per month..so we are now at 1,173.Strata around 200$ im guessing now your payment is $1,373.Property transfer tax?say about 4,000$ …This is with 20% down mind you.If you where only to put 5% down your closer to the $1700 that i originaly quoted.Now lets say you pay the whole thing with cash @975rent your return would be .04% YOY ..wow even the bank pays 1.25% intrest.
HIM:The cash flow analysis depend strictly on your motive as an investor. If you are happy with bank paying you 1.25% interest for the remainder of your life, be happy with that. Your analysis don’t conclude current and future economic trends, urban economics and land development in the area. No where in my ad did I mention cash flow analysis or promise a $100K in 3 years. I have been investing since 2003 and have enjoyed significant to modest capital gains, passive to negative cash flow but all was warranted in the situation that I chose. This particular condo is a long term investment as more commerce moves to this area over Vancouver. There is an average of 1,000 people moving to Surrey every month. There are 15 high rise pending permits in Central City alone with the City of Surrey.
I would be lying if I said that this is get rich quick investment. Only forms of investments that will yield you quick liquidation is urban land development but be prepared to heavily invest capital. Subject is not my property but my client’s.
Assuming your payments of $1,373 a month vs rent of $975, that’s $398 deficit. Hmm, if you could put $400 a side into your savings account @ 1.25% compounded on a monthly basis and be taxed fully vs investing in an asset with potential gains in terms of thousands of dollars and taxed at 50% of capital gains. Pretty hard if not impossible to beat.
I am willing to challenge any question you may have regarding investing as I don’t speak from reading what others have done but what I have personally achieved. Apologize as I am not tooting my own horn but sharing from my own experience.
I have pile high testimonials from perspective investors who have done business with me.
I will be willing to meet and discuss your perspective.. All I ask is that you respect my profession like I would do yours.
Always willing to debate
FUNNY how his tune changes and he finally admits its negative casflow
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November 4th, 2012 at 10:34 am 132
This topic is really puzzling me. Why would the people who have sufficient finances (or can take a mortgage) continue to buy condos. But the evidence is strong, particularly in Toronto (Market Watch: Strong Average Price Growth in September), the capital of Condominiums.
Who is the condo buyer? Is it an average Canadian with two children or young couple from China? Or is it some millionaire who plans to speculate or rent it? Social scientists from Vancouver or Toronto have an unique opportunity to investigate this very interesting topic.
Hot debate. What do you think?
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November 4th, 2012 at 10:38 am 133
Hi all,
Can anyone tell me what 747 E. Pender St. sold for, and perhaps the recent sales history? It was most recently listed for $1.069M (see here, for now), and before that at $1.198M (see here.) I’m curious to know if it sold below the magical $1M barrier, and whether recent history includes a sale or just pull-and-relist.
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November 4th, 2012 at 11:36 am 134
Hidden due to low comment rating. Click here to see.
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November 4th, 2012 at 12:16 pm 135
@Colt: Even more interesting is that the realtor admits he isn’t just “facilitating real estate purchases” but is in fact “investing” in real estate and using his profession to get others into the ‘scheme’ as well.
More and more it is apparent that there is a large segment of realtors are involved in the equivalent of real estate ‘up-line marketing’.
For this segment of real estate agents, it’s all about getting more and more involved in the Ponzi.
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November 4th, 2012 at 1:03 pm 136
@Turkey:
i cannot believe that someone would pay $1M to live there.
are the needles free?
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November 4th, 2012 at 1:26 pm 137
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November 4th, 2012 at 1:26 pm 138
Here are mish shedlocks latest comments on vancouver:
“Economists never envision a meltdown. But a massive meltdown is coming anyway. I must admit the pool of greater fools in Vancouver and Toronto was far, far bigger than I thought possible, but at long last the pool seems to have dried up. A crash awaits.”
Read more at http://globaleconomicanalysis.blogspot.ca/#MIrI6hXCiVDYDpxO.99
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November 4th, 2012 at 1:33 pm 139
word on the street
1 Three families i know who sold a year ago say they timed the peak
2 an owner friend says the peak was in march
3 a condo owner friend says he bought at the peak a year ago
no optimism in my surroundings
Hot debate. What do you think?
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November 4th, 2012 at 1:57 pm 140
@Painted turtle: No optimism from group 1) ?!
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November 4th, 2012 at 2:18 pm 141
was debating with an ex-faux-bear now turned bullish after purchasing a new 2-storey TH in Richmond in June. Ended up making this HPI YOY % Change graph which I’ll share here.
http://s12.postimage.org/58358mej1/RMD_TH_HPI_YOY.jpg
Looking forward to seeing similar trends in other regions.
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November 4th, 2012 at 3:20 pm 142
Helmut Pastrick locks in a bottom call!
http://vancouverpeak.com/groups/general-chatter/forum/topic/bottom-call-thread/?#post-2651
“This is not the beginning of a major correction or recession or decline in housing prices of 15 or 25 per cent as some predict, mainly because we are not seeing an economic recession play out at the same time.”
Booked.
Hot debate. What do you think?
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November 4th, 2012 at 3:34 pm 143
$13,000 a month and no parking?
http://vancouver.en.craigslist.ca/van/apa/3334528234.html
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November 4th, 2012 at 3:34 pm 144
@jesse:
Wasn’t it Pastrick who claimed on an on-line chat not too long ago that a housing downturn could not happen without a recession, and then someone came on and said that US house prices started declining well before the recession. He then said that the US downturn was due to a “housing recession” (which seems to be circular causality to me).
Anyone else remember this?
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November 4th, 2012 at 3:35 pm 145
@Colt: ” Hmm, if you could put $400 a side into your savings account @ 1.25% compounded on a monthly basis and be taxed fully vs investing in an asset with potential gains in terms of thousands of dollars and taxed at 50% of capital gains. Pretty hard if not impossible to beat.”
The only thing left after guys like this are beaten down is the “long term”. He’s comparing a 1.25% cash account to a riskier asset class? I don’t think you’re the droid he’s looking for.
Hot debate. What do you think?
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November 4th, 2012 at 3:37 pm 146
Anyone have any idea what this house would go for in this market?
http://vancouver.en.craigslist.ca/van/apa/3320822770.html
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November 4th, 2012 at 3:44 pm 147
the Battle of Vancouver is now underway!
Areas with Positive Year-over-year HPI are controlled by Bulls.
Areas with Negative Year-over-year HPI are controlled by Bears.
Update from the S.F.H. frontlines:
GVREB: New West is about to fall into bears’ hand.. urr.. paws.
FVREB: North Delta is about to become bear territory.
http://vancouverpeak.com/wp-content/uploads/ubpfattach/battle-of-gv-sfh-2012-10-all.jpg
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November 4th, 2012 at 3:55 pm 148
@YLTNboomerang: I’m not sure it’s the mighty are falling on this one because I know someone who knows someone who is selling a street-facing townhouse in the Erikson, priced roughly what this is priced for.
Unfortunately, her husband died just before their moving date last year. The owners offered her a chance to get out of the sale (as per the law) but because it was her husband’s dream home and because she was in mourning and not aware of market conditions (he’s the biz guy/not she)… she went ahead and completed. I hope she is OK and doesn’t get too badly hurt on the sale. It’s just one more sad story when RE markets go through the stratosphere and come back down again.
VREAA don’t reprint this story. Please.
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November 4th, 2012 at 3:58 pm 149
@Makaya: I call BS. We went to see that unit a year ago. Asking 850K. Maybe it came down from 900K max. Again, another sleazy move by a real estate agent. 1.1Million was probably the original 2008 asking price before ground was broken in the OV.
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November 4th, 2012 at 4:16 pm 150
@patriotz: “Anyone else remember this?”
Yes, he was online at the Globe and Mail I think, chatting alongside Madani or one of those. That exchange is still on the G&M website, searchable through Google. I find Pastrick’s arguments backwards. I don’t know why he’s so adamantly sticking to arguments so clearly proven inadequate in the US. But who am I to say, he probably earns multiples of my income!
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November 4th, 2012 at 5:14 pm 151
A good read for a sunday evening…
The people’s debt: B.C. has the most heavily indebted population in the country — and the number is growing
Some tidbits:
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November 4th, 2012 at 5:18 pm 152
holy crap.
nearly 40k average non-mortgage debt?
q: does “consumer debt” include student loan? (I would guess no, but am not sure).
wow.
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November 4th, 2012 at 5:35 pm 153
Battle of Vancouver: Condo Front is also under way.
Areas with Positive Year-over-year HPI are controlled by Bulls.
Areas with Negative Year-over-year HPI are controlled by Bears.
Update from the S.F.H. frontlines:
REBGV: Vancouver West, at 0% YoY, and 0.2% MoM, has both sides evenly matched.
FVREB: Langley will soon be controlled by Bears.
http://vancouverpeak.com/wp-content/uploads/ubpfattach/battle-of-gv-condo-2012-10.jpg
Hot debate. What do you think?
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November 4th, 2012 at 6:06 pm 154
Hidden due to low comment rating. Click here to see.
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November 4th, 2012 at 6:11 pm 155
@Unsettled Worker:
“Who is the condo buyer? ”
Just a guess, but I imagine many are bought by people whose houses have appreciated recently, giving them “equity” that they want to “invest.” (You may wish to use the terms “transient paper gain” and “speculate” instead.)
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November 4th, 2012 at 6:12 pm 156
@mac: And let me say one more thing about that BS Olympic Village penthouse unit. You have a choice–either dining room table or couch. That’s how small the living dining room area is. You can see the pics… there’s no dining room table. That’s not a penthouse. That’s a top floor unit looking directly east. There’s no view of the village unless you go out on the balcony and stick your head around the glass divider that separates your unit from your neighbours and look North.
We went to look at a few units today. Crickets. Agents seem very nervous when I said we believe in a decline in prices so maybe next Spring is the best time to buy but maybe not. Who knows? (I find it more effective to be positive, yet hesitant about buying… then the agents freak. But when you insist absolutely there will be a decline they fight back). Before we left she spilled all the beans to encourage us to write… the lady has to sell, she’s bought another place, she did 50K in upgrades but is only asking 40K more than she paid six years ago, she’s motivated, etc., etc…. who knows if that’s true.
Hot debate. What do you think?
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November 4th, 2012 at 6:25 pm 157
But when you insist absolutely there will be a decline they fight back). Before we left she spilled all the beans to encourage us to write… the lady has to sell, she’s bought another place, she did 50K in upgrades but is only asking 40K more than she paid six years ago, she’s motivated, etc., etc…. who knows if that’s true.
That shit pisses me off. Realtards are supposed to work for their client not you. They are scum who will do anything to get a sale. I wonder if that industry will ever change?
Hot debate. What do you think?
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November 4th, 2012 at 8:05 pm 158
I wonder if booze can solve SAD. Drink yourself into a coma until the end of the dark rainy season. It will be what? Six months?
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November 4th, 2012 at 8:18 pm 159
@mclovin:
Doing anything for a sale IS working for their client.
Hot debate. What do you think?
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November 4th, 2012 at 8:21 pm 160
@mclovin: “Anyone have any idea what this house would go for in this market?”
3 to 3.5 million would be my guess. At least that is what they would ask for it. It may only be worth 2.75 today and half that in a few years.
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November 4th, 2012 at 8:31 pm 161
@Vote Down The Facts: Then the inherent conflict of interest buyers agents possess is no surprise.
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November 4th, 2012 at 8:53 pm 162
@jesse:
I don’t see the problem providing both buyer and seller are willing participants.
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November 4th, 2012 at 8:55 pm 163
@mclovin: I agree with you but in this market where the first open house on a pretty well-priced nice property nets you 2 visitors every 20-30 minutes of your 2-hour open, you get the feeling the agent doesn’t want to let you out of the house without you knowing that your offer will be welcome. Such a difference between now and a few years ago when there were 20 pairs of shoes at the door and 3 inspectors clambering all over the property to get their report in to buyers who were preparing their bid on the spot.
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November 4th, 2012 at 9:15 pm 164
@Vote Down The Facts: I don’t see a problem either, as long as one understands the buyer agent is NOT always working for his/her client.
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November 4th, 2012 at 9:48 pm 165
@mac:
call up the Realtor for 881 Saddle in Ranch Park (coquitlam) and inquire how much they’re asking – bear in mind (haha, get it?) that the neighbors all bought their homes 30 years ago for 50-100k.
who wants to live in an ‘executive style’ mansion beside a bunch of ranchers and bungalows? one more symptom of delusion – builder/owner – neighbors are not happy with this behemoth.
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November 4th, 2012 at 10:51 pm 166
@jesse:
Helmut Pastrick locks in a bottom call!
Helmut Pastrick is an economic ‘tard only capable of projecting linear equations…
If I want economic predictions from a Muppet, I’ll listen to his doppelgänger, Telly, from Sesame Street…
http://toughpigs.com/uploaded_images/Tellyponder-769224.jpg
http://vreaa.files.wordpress.com/2010/12/helmut-pastrick.jpg
Separated at birth, or what?
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November 5th, 2012 at 3:20 am 167
@jesse:
“I don’t see a problem either, as long as one understands the buyer agent is NOT always working for his/her client.”
The buyer agent is always working for their client all right. Their client is the party who is paying them – the seller.
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