Happy New Year / Site!

December 31, 2012 admin

Well, that was 2012. The real estate market peaked in Vancouver at about the half way point and started heading down.

As we head into 2013 we’ll be watching the market with interest – some of the stats right now are looking as bad as the crash of 2008.

Unlike 2008 we’re now looking at a tighter credit environment and rock bottom interest rates. It will be interesting to see if there are any more rabbits in that hat.

Thanks to everyone who has taken part in the VCI community this year and your patience with our recent down-time. We’ve made a number of changes around here to hopefully avoid a similar occurrence in the future.

We’ve also split off VancouverPeak.com from this site and that forum is now running proper forum software which should work much better than the half-way solution we had running before. Blogs are great, but there is some information which is better served in the discussion forum format.

Things like tracking stats or user generated conversations that can carry on beyond a daily thread are where forums shine, so we invite you to check out the new site at http://vancouverpeak.com

Unlike the previous incarnation registration is open to everyone, but we’ve instituted some automatic user pruning policies that you should know about. Newly registered accounts have 24 hours to activate their membership via the automated email you will receive after registering. Please leave at least one human comment within 2 days of registering or your account will be automatically deleted.

We had some good threads on the old site, and we’re manually going through the database and trying to restore the good ones, but it’s a slow process. If there’s anything specific you would like us to focus on you can leave a request in the comments.

Thats about it for now, hope you had a good 2012 and here’s to a Happy New Year!

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C.Junta

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@HAM Solo #78
“encourage the inevitable bail-out talk that will start coming later this year”

Not sure about the timing of the massive talk (2013 sounds a bit early to me) but I totally agree with you on spreading the word about the Great Canadian Bailout we are facing. I am doing that for a few months already.

The good thing is that you don’t have to scare off people revealing your RE bear identity when talking to your friends (home owners or renters, doesn’t matter) about this. No need to use terms like “housing bubble”, we can operate with buzzwords like “easy credit”, “unbalanced budget”, “spending habits” instead.

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squeako

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“Why dispossess young families in Surrey for financial incomptetance while propping up the far more incompetent (and evil) credit union directors.” Sure, make the banks/credit unions do their share, but are young families really that incompetent? Hmmm.. I think they are regular people too and can be just as greedy and want want want. Why not dis possess? Can’t they rent? If you bite off more than you can chew, you will choke, better to spit it out now, even kids know this. I see people that are supposed to be “poor” and “uneducated”, but they are sailing through the web and can find out anything they want, they own the latest in apps/gadgets etc. Yes, not a degree in economics, but I dont think that is an excuse for chucking out some common sense, surely people must have some… Read more »

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Anonymous

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….I have been running on the beach and, looking up at how inviting the snow on he mountains seemed, decided to head up there in the afternoon. It is nice, and it is unusual. I do a lot of sport and all my athletic friends (who are basically all transplants) agree that Vancouver isan excellent place for it. ..

Yes, isn’t it sad that there are no other places in BC with snow. And running, well, that’s actually illegal in most places. Paying 5 times the national average to live in a place were one can see view mountains 3 days per year; where do I sign up?

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real_professional

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Oh yes, anecdotal remarks I found interesting. I had lunch today with some family, one person owns a limo company: He said business was very slow last year, nothing like previous years. Another owned a restaurant, said business dried up, although complained about competition. Finally, another owns a big rig for local shipping. His story was most interesting as as he does mainly intermodal shipping from the airport, air freight of consumer goods that come into Vancouver. According to him, work has been very slow for months now. He said, the goods that he transports can be anything from laundry detergent to fruits to electronics – if shipments aren’t coming in then demand forecasts by business is down or inventories are full.

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real_professional

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@ no noise

Or, how about translink fees jumping 10% as of 2013. Happy New Year, someone tell Translink what CPI change is.
http://metronews.ca/news/vancouver/493042/translink-celebrates-2013-with-fare-increase/

So a typical homeowner wakes up in their depreciating home, pays extra muni tax to keep that home, spends 10% more to ride the bus or is tolled to cross a bridge just to get to a job where wages have been stagnant

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No Noise

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@ An Observer

It sure doesnt help anyone face reality when every homeowner in BC gets their letter shortly from BCAssessment which apparantly, and as you have said, was based on July 2012 valuations. But we’ll all know by spring/summer 2013 exactly how bad things are..

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No Noise

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Cost of Vancouver home ownership rises while valuations drop – double ouch!

“In Vancouver, homeowners will pay about three per cent more in 2013 on their property taxes and utility bills..”

http://www.vancouversun.com/news/Rate+hikes+increases+higher+user+fees+ring+2013/7758542/story.html

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I also agree that bailout talks are way off in the distance. This ship is going to be sunk and you’ll still have Tsur and Cam and the rest of the fools claiming that things are flat with buyers dreaming if they expect prices to drop.

The HPI in Van West is down over 10% in 7 months which is probably up there with the most dramatic 7 month drops anywhere and they are still claiming no price drops and a soft landing…

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HAM Solo

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@ p

If the CMHC runs out of capital, there are no formal obligations to fund it…one would have to get created on the fly. If VanCity becomes insolvent, there is no law that says it has to be recapitalized.

These are the future discussions to which I am referring. And if we start seeing big double digit drops in HPI type measures later in 2013, I suspect people will start talking about bailouts of the banks. Call it a hunch. Check back with me Jan 2014.

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“One of my New Year’s resolutions is to encourage the inevitable bail-out talk that will start coming later this year”

Your timetable is way off. Toronto and most other markets just peaked and the great majority of homeowners won’t even be aware that prices are falling come the end of 2013.

Prices in the US peaked in early 2006 and the bust really didn’t become common knowledge until 2008.

As to what the PTB are going to do, that’s always been pretty clear IMHO – honour their obligations to the lenders and let the borrowers hang up to dry.

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HAM Solo

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One of my New Year’s resolutions is to encourage the inevitable bail-out talk that will start coming later this year to focus on fairness in addition to mere expediency. A bail-out of sorts will definitely arrive in Canada because there isn’t a scenario that involves literally millions of high LTV borrowers and 20-40% price corrections that doesn’t involve the failure of the entities backstopping the financial risk. I realize I am playing the game a couple of steps ahead, but it would help if everyone started thinking a bit about where the puck is going. And where it’s going, in my view, is to a closed door discussion between H and F about how much cash is printed up by the BoC to bail out the CMHC, the Genworth creditors, the various banks, the credit unions etc. The dopes who… Read more »

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kansai92

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Happy New Year Vancouver!

http://www.vancouversun.com/news/Rate+hikes+increases+higher+user+fees+ring+2013/7758542/story.html

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As 2013 comes into focus there have been some great comments on this and other blogs on what 2013 will bring. I have a few thoughts on the downside of 2013. This isn’t anything new, other commenters have dealt with this already but I’ll throw my thoughts out there fwiw: 1) Credit conditions will be tighter. OSFI B20 will be in full force. Vancouver will, going forward, require LTV derating because prices are seen as potentially being weak over the coming years. Longer loan terms with mid-range LTV will either be admonished or be charged a premium. As well we will have the full spring selling season with new 25 year MI caps. The government has instituted a cap on total IIF and lenders will have to find other ways of securitizing their loans. Vancouver exposure in particular will be… Read more »

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@Crikey, it doesn’t matter if you don’t trust the HPI (I still have doubts as well), just saying that it is a pretty good estimate in terms of how your assessment might change for each property type in different areas. I own a SFH in Burnaby and the assessment increase matched exactly what the HPI increase was for the year.

Interesting that this is going to ensure that just about nothing, anywhere sells above assessment in the coming year.

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BC Assessment 2013 is out.

Another 10% increase (Van West)! Those flippers did this. Maybe this is the peak number for this area, until 2020 -:).

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Apocarypse Mao

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@ No Noise.

FYI: BC Assessments are based on july 1st valuations.

And higher property assessments do not mean property taxes automatically go up. They are set by municipal budgets and are pro rated by a ‘mill rate’. If the municipal budget remains the same, then there will be no tax increase.

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kansai92

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Vancouverites are so debt-laden, they can’t afford to golf, ski, or sail.
But you’ll find them at the dollar store and at the local Hong Kong cafe eating a $4.95 meal with milk coffee at 3pm.

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Crikey

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An Observer said: “if you follow this link which shows HPI from June 2012…that should be a rough estimate on how much your property changed”…”Most SFH’s will be up and most townhomes and apartments will be flat”

Sorry, don’t trust the “MLS Home Price Index”, don’t give it any merit.

Nevermind that it is the MLS HPI, which in itself is enough to make me doubtful, but there is too much confusion and questioning about the obfuscated methods they use… and the need for this over previously existing methods.

In US, do you know what the legal repercussions there were when a real estate board admitted it had “accidentally” been releasing incorrect stats for many months, double-counting sales, etc, etc? Absolutely none.

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Left already living in San Diego

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Back here for the new year into sub zero temperatures. Other than spending time with friends and family,this city sucks big time. The Christmas atmosphere is here no more. The city has undergone a cultural and demographic transformation beyond belief. I hope it is for the better. Sometimes I feel like driving in the soulless boring suburbs of New Delhi or Beijing. And those suburbs have rapidly grown and encircled the whole city now, Vancouver is such a bore! All the jokers who think skiing golfing and sailing on the same day in Vancouver, have done none of them separately, let alone together. They are just repeating the real estate propaganda they hear endlessly on TV and radio. It works indeed. I come here for skiing , but to do that you have to go to Whistler where you have… Read more »

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Regarding assessments, remember that this is based on June 2012 so if you follow this link which shows HPI from June 2012 and look at the “1 year change” column, that should be a rough estimate on how much your property changed

http://www.rebgv.org/home-price-index?region=all&type=all&date=2012-06-01

Most SFH’s will be up and most townhomes and apartments will be flat but if course it is very regional. Next year’s assessment is going to be down across the board since we’ve already clocked in 6 months of fairly sharp drops

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No Noise

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Just had a look at BC Assessment and some of the 2013 numbers appear to be posted already (I could be wrong and I guess tomorrow will be for sure) and are in line with recent drops. A sibling of a colleague works for BC assessment and has hinted that the 2012 assessments were way higher than current reality. I know very well from personal experience. I would think they are trying to be as current as possible but that won’t make the taxman happy at all..

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Girlbear

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@Troll Feeder

Car2go

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kansai92

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Just checked BC Assessment… condo I sold for $470K in 2008 only assessed at $522K. 11% paper gain… and that was last year’s assessment… minus transaction cost, I wonder if buyer would even break even.

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real_professional

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@ anon

Couldn t agree with you more. bullish sentiment is a good thing for bringing about a real estate correction, once sentiment is extremely bearish real estate will have reached rock bottom and one should buy because upside shocks are likely to exceed downside shocks. And, at that point, price multiples vs history and comparables are more likely to scream “cheap”. it is contrarian at extremes.

Note; on tablet hard to type

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real_professional

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@ Troll feeder

yes, but if you own your home your coffee would taste better and you would have friends that are always laughing and never wear a watch, like in beer commercials. There is so much more to home ownership than just cost and a roof over your head. You will appear taller and in better shape, women will smile at you more, and people will laugh at your jokes.

Now go, sip your sub standard and owner subsidised coffee…. you will likely find it bitter much like your land-“lord”

Bubble? What Bubble?