2013: Everything costs more

Well, maybe not everything…

You can probably pay less for a computer or a house, but many of the day-to-day expenses of living are going up around here.

As the new year rolled over there was a spate of announcement for rising taxes, user fees, premiums and fares in BC.

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

The cost of health care premiums is set to rise in the province, from $128 to $133 per month for a family, adding up to $60 per year, according to the Canadian Taxpayers Federation.

“Most of us would say, ‘OK, we can squeeze out five dollars a month somewhere,’ ” said spokesman Jordan Bateman.

But, he added, this is the fourth January premiums have increased and “it’s really starting to weigh down taxpayers.”

Federally, Employment Insurance and Canada Pension premiums will also increase.

Workers who make over $47,400 will pay $891, up $51 from last year, and employers will pay $1,247 in EI premiums, up $72. Workers and employers will both pay an extra $49 in CPP premiums, with workers paying $2,356 in 2013.

The cost of getting around is also going up.

Yep, Translink fares are going up too – a one zone fare goes from $2.50 to $2.75.  Also Tolls and BC Ferry fare.

For the whole list check out the original article in the Vancouver Sun.

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gokou3
Guest
gokou3
3 years 8 months ago

Like Garth Turner said, price inflation and asset deflation.

VMD
Member
3 years 8 months ago
2012 Assessment vs Purchase Price (a Van West neighborhood) This is my brief attempt to capture the Sale price trend vs 2012 Assessment Price (published on Jan 1, 2013) in an area of Vancouver West. I picked this area because a friend of mine just bought there in early 2012. As we can see, the buyers who bought in Jan-Mar 2012 paid 9-10% OVER their 2012 assessment price (assessed on July 1st,2012). By September, properties are changing hands at 6% UNDER assessment price. Month Assessment_vs_Sale_Price Jan -9% Feb -9% Mar -10% Apr -6% May -3% Jun -1% Jul +1% Aug… Read more »
Name taken
Guest
Name taken
3 years 8 months ago

Do not confuse government-mandated taxes and fees with market prices. Things like CPP, EI, healthcare premiums, tolls, etc, are managed by bureaucrats who are spending other people’s money. Naturally they do it rather inefficiently. It is easier to collect more tax than to fire public unions or make some difficult choices that would improve spending efficiency. This trend of increasing tax rates is not new and it will stay here until there are fundamental changes in the system. Fundamental as in “system collapse”, “revolution”, etc.

Anonymous
Guest
Anonymous
3 years 8 months ago
I went downtown yesterday for the first time in months. I used to work retail downtown for many years. I have to say something did not seem right yesterday. Where was everyone??? The streets were dead. Not a soul at the art gallery steps. My friend said maybe everyone is hung over from New Years Eve. I said, I don’t buy it. I worked downtown for years and even on New Years Day, people would be out on the streets, people would be hanging out on the Art Gallery steps. Homeless kids would be playing hacky sack and asking if… Read more »
Anonymous
Guest
Anonymous
3 years 8 months ago
I just want to add something to my post about my walk downtown yesterday and the deserted streets and huge number of vacant apartments in the West End. You have to keep in mind that right now is one of the worst times of the year to be looking for rentals. Most people do not want to move during Christmas or during the winter so traditionally it’s been very hard to find vacancies for Jan. 1st or Feb. 1st (Sept. 1st is also hard because you are in competition with students). The best time to look for rentals is in… Read more »
Girlbear
Guest
Girlbear
3 years 8 months ago

Anon #4-5

Same thing in Kits. Seems like every second building has a vacancy sign in front. Never seen this in all my days of living on the westside.

Ford Prefect
Guest
Ford Prefect
3 years 8 months ago

gokou3:

Those who disagree with you should definitely read the work of Jeremy Grantham @ GMO.

Beyond argument he shows that all commodities, which means all prices, have increased dramatically and idiosyncratically (ie without usual underlying cause such as war for ex.) in past ten years. (He looks back, with very careful analysis, at real commodity prices for past 100 years).

Bag it and tag it
Guest
Bag it and tag it
3 years 8 months ago

Sorry I can’t find a link, but watching BNN this morning they posted that bankruptcies in Canada increased 13% from October to November.

pricedoutfornow
Guest
pricedoutfornow
3 years 8 months ago

@Anonymous:
Re: rentals. Not sure if this year is any different than any other year, but we’ve been scoping out different places to live in our East Van neighborhood. There seems to be a ton of supply right now, I keep seeing the same landlords advertising over and over again, they just can’t seem to find tenants. Often the rents keep going down too, on certain properties. A lot of these properties are those that were for sale in the spring, couldn’t sell, now trying to rent (often unsuccessfully). Soft rental market, at least where we live.

Bag it and tag it
Guest
Bag it and tag it
3 years 8 months ago

#2 VMD
Great info. Any chance of getting Oct-Dec data? I’m very curious.

Yellow Helicopter
Guest
Yellow Helicopter
3 years 8 months ago
@Anonymous 4&5 and @Girlbear, I also live in the West End and have seen the same thing. We moved downtown in 2007 and at that time, you had to practically beg to get an apartment here – show up in your finest, references in hand, with 30 other people there at the same time, and be ‘interviewed’ by the landlord. Things are definitely changing -but I wonder if it’s because of the high ownership rates? If 70% of people own, who is left to rent, other than the transient student types? (And us bears. 😉 )
Mick Murphy
Guest
Mick Murphy
3 years 8 months ago

Home values in region decreasing
Notable decreases in Whistler, the Sunshine Coast, and Vancouver’s West Side

http://www.news1130.com/2013/01/02/home-values-in-region-decreasing-in-value/

RaggedyRenter
Member
RaggedyRenter
3 years 8 months ago

@VMD,
I also ran the same spreadsheet yesterday
I saw the same trend in Coquitlam SFH nearby a friend’s purchase, it starts under-assessed, peaked in April (+6%) and goes downhill afterwards, by October it’s -6%

I’m wondering if this is the same trend in any other year, but more pronounced due to the price correction in the latter half of the year.

Best place on meth
Guest
Best place on meth
3 years 8 months ago
China officials, fearing crackdown, are dumping illicit properties http://www.fcpablog.com/blog/2013/1/2/china-officials-fearing-crackdown-are-dumping-illicit-proper.html# Real estate agents in Guangdong and Jiangsu provinces are reportedly scrambling to sell a “torrent” of properties suddenly thrown onto the market by officials fearing exposure ahead of an expected anti-corruption crackdown. A Jiangsu official was overheard barking into his mobile, “Sell these four houses for me as soon as possible. Don’t sell them any cheaper than two million yuan (US $319,660) each. Quick, quick, this is how we will settle it.” In theory, officials are required to disclose all their assets to higher-ups on an annual basis. Loopholes and spotty… Read more »
yvr2zrh
Member
3 years 8 months ago

Re: Assess v. Sale price.

For December, I had already done Van-West Detached.

The sale price for December was 9% below assess on average.

An Observer
Guest
3 years 8 months ago

Perfect storm building against Vancouver real estate and the economy… in my opinion we’re going to be flirting with the worst economic period in our history in this region over the next 4 years… Happy New Year!

gokou3
Guest
gokou3
3 years 8 months ago

@ Ford Prefect #7

Those who down-voted my “Like Garth Turner said, price inflation and asset deflation” probably voted because it’s said by Garth Turner as opposed to disagreeing with what he said.

southseacompany
Member
southseacompany
3 years 8 months ago

Press release from BC Assessment, including examples of local market trends for different unit types.

http://www.bcassessment.ca/News%20Releases/Vancouver%20Sea%20to%20Sky%202013%20Assessment%20Roll%20News%20Release%20FINAL.pdf

The examples show change from July 1, 2011 to July 1, 2012, so much of this is past history already in today’s quickly changing market. Interesting none the less.

Makaya
Member
Makaya
3 years 8 months ago

If you haven’t seen it yet, here is Larry’s latest inventory chart for the three RE Boards of the region (Vancouver, Fraser Valley, Chilliwack).

The starting inventory this year is a lot higher than previous years…

gokou3
Guest
gokou3
3 years 8 months ago

Re: #12

So in UBC Real Estate expert Tsur Somerville’s world, “flat” means down 3-6%. You know what hits the fan by the time he says “down slightly”. Oops, he just said it.

RaggedyRenter
Member
RaggedyRenter
3 years 8 months ago

It’s always going to be flat.
As we go on, he’ll just say
“You know, if you look at a period from 2011 to now, we’re pretty flat”
“You know, if you look at a period from 2010 to now, we’re pretty flat”
“You know, if you look at a period from 2009 to now, we’re pretty flat”
“You know, if you look at a period from 2008 to now, we’re pretty flat”

Remember the YO2Y stats? It will show up soon on the monthly report

Bull! Bull! Bull!
Guest
Bull! Bull! Bull!
3 years 8 months ago

VMD and yvr2zrh deliver two high quality posts. They are the best posters on this blog. It’s interesting that they also post a lot less frequently from other regulars.

Maybe some should make resolutions to post less 😉

Just Looking
Guest
3 years 8 months ago
@Name Taken While I don’t disagree that there is waste in government, I would also suggest that there is waste in the private sector that often gets ignored by those who argue that that it would be much more efficient if the private sector ran the show. I haven’t seen a good study on this, though – anyone know where some objective data on this might be found? The other aspect that those who share your view often ignore is Baumol’s Cost Disease. Essentially Baumol’s theory describes the notion that some industries drive the expansion of productivity of a given… Read more »
Makaya
Member
Makaya
3 years 8 months ago

@Bull!

Maybe some should make resolutions to post less

I guess that includes yourself, right?

Dan
Guest
Dan
3 years 8 months ago

@gokou3 #17

I voted it down because BC’s latest y-o-y CPI inflation was an almost deflationary 0.1%! ie. Garth was dead wrong on price inflation.

http://www.statcan.gc.ca/daily-quotidien/121221/dq121221b-eng.htm

UBC in Crisis Mode
Guest
UBC in Crisis Mode
3 years 8 months ago

VMD says:
“This is my brief attempt to capture the Sale price trend vs 2012 Assessment Price (published on Jan 1, 2013) in an area of Vancouver West.”

Thanks for the exercise. If you do the same to Point Grey area, the change may be larger (way smaller sample size, I would say).

Anonymous
Guest
Anonymous
3 years 8 months ago

@22 Bull[pucky]Bull[pucky]Bull[pucky]!: “Maybe some should make resolutions to post less.”

Thanks for volunteering! 😉

patriotz
Member
3 years 8 months ago

“I voted it down because BC’s latest y-o-y CPI inflation was an almost deflationary 0.1%! ie. Garth was dead wrong on price inflation.”

He was dead right. > 0 is inflation.

Not trying to defend Garth really, just arithmetic.

Dan
Guest
Dan
3 years 8 months ago

@ Ford Prefect #7

Commodities follow a 30-31 year cycle. It’s mostly supply-side driven. The last decade was the up up & away part, as shown below.
http://i51.tinypic.com/2r551r5.jpg

gokou3
Guest
gokou3
3 years 8 months ago

Not defending Garth at all, but didn’t that Vancouver sun article just listed out a bunch of price increases? And, in the real world, it sure feels like inflation is higher than the govt numbers showed.

SDR
Guest
SDR
3 years 8 months ago

i wonder if all the apartment vacancies are sign of exodus of foreign students and people in general from Vancouver in the last 6 months?

Name taken
Guest
Name taken
3 years 8 months ago
Regarding West End – rent prices are up about 66% over 10 year period. These are for the same buildings that were already old 10 years ago, they only got older, and those that are renovated create major issues for tenants during renovation cycles. Since not many people had their incomes go up by 66% in the last 10 years it explains why there are vacancies. Besides many people who lived in West End 10 years ago retired and now have less income that what they used to have 10 years ago. To top it off, you’ve got to be… Read more »
Name taken
Guest
Name taken
3 years 8 months ago

Guys, you keep confusing government taxes and fees and concepts like “inflation”, “prices” and “assets”. Taxes and fees will keep going up irrespective of monetary inflation/deflation, irrespective of retail prices for any goods or services and irrespective of prices of any kinds of assets.

data junkie
Guest
data junkie
3 years 8 months ago

“One hour drive away…”

lol

SDR
Guest
SDR
3 years 8 months ago

i don’t buy that move “one hour away” either.
tough to picture somebody trading West-End lifestyle with one in Aldergrove. The people who lived in West End are more likely to move to Montreal, Toronto even Calgary then Fort Langley and such.

data junkie
Guest
data junkie
3 years 8 months ago

I guess I am an unconscionable snob because I considering spending a nice, comfortable 28% of my gross income on RENTING a lovely place in core Vancouver to be a pretty normal thing. It means I don’t need to bother with the hassle of a car, let alone a commute. The most obnoxious part of my day is the fact that sometimes the B-Line is crowded going westbound in the mornings, and I’m too lazy to walk the three blocks to Cambie for the Canada Line.

But do tell, how is the Pattullo holding up these days?

data junkie
Guest
data junkie
3 years 8 months ago

Ugh, The Pope, please bring us an edit function in the new year! 🙂

Just Looking
Guest
3 years 8 months ago
@Name Taken “Taxes and fees will keep going up irrespective of monetary inflation/deflation, irrespective of retail prices for any goods or services and irrespective of prices of any kinds of assets.” Except they haven’t. According to OECD Data Candian Tax Revenues as a % of GDP in 1970: 30.9% Canadian Tax Revenues as a % of GDP in 2010 31.0% http://www.oecd.org/ctp/taxpolicyanalysis/revenuestatisticstaxratioschangesbetween1965and20102012edition.htm You can pick different time frames to give you different conclusions (1965 to support the view that taxes have risen 5% of GDP, 1990 to support the vie that taxes have fallen 5% of GDP). The point is that… Read more »
Name taken
Guest
Name taken
3 years 8 months ago

Measuring taxes as percentage of GDP is meaningless because GDP includes government spending which in turn is fed by combination of taxes and debt. Look at taxes as percentage of private economy. Or as percentage of individual incomes.

VMD
Member
3 years 8 months ago

Just did the exercise for Dunbar region
According to this batch of sample, the ones who bought in Jan-Mar 2012 paid 14%-15% over the new assessment price.
sample size: 91

Name taken
Guest
Name taken
3 years 8 months ago

Regarding one hour drive- the secret is that you don’t have to actually drive. You can live in those communities just as well as you can in West End. And owning a car is not such a bad thing- allows you to explore and enjoy this beautiful province, as well as visit neighboring states. Maybe if you had a car you could spend less time behind your computer and more time in the real world.

Best place on meth
Guest
Best place on meth
3 years 8 months ago

Did anybody here spend this lovely day golfing, skiing and sailing?

I know the realtors haven’t because they’ve been busy posting new listings and re-listings and they’re only going to get busier with each passing day.

You know, in all the time I’ve lived in Vancouver I’ve never met a single person who sailed.

Not one.

Name taken
Guest
Name taken
3 years 8 months ago

SDR, I did live in West End for over 7 years, then about 4 years ago I moved out. Not only I’ve got a bigger place, but I have been saving $1600 every single month in rent. And that is relative to 4 year old rents, today would probably be well over $2000 per month in rent difference. So I have already saved about $100k in after tax dollars on rent. Do you know how much fun you can have with $100k in disposable cash that you get to spend on something other than rent?

Makaya
Member
Makaya
3 years 8 months ago

@Name Taken

Not only I’ve got a bigger place, but I have been saving $1600 every single month in rent.

If you saved $1,600/ month, that probably means you moved to a place in which you’re living in for free, right?

Anonymous
Guest
Anonymous
3 years 8 months ago

….You know, in all the time I’ve lived in Vancouver I’ve never met a single person who sailed…..

I know that we’ve never met but I’ve sailed plenty of times over the last 20 years. And as a previous poster alluded, every single time has been in the rain. One of the unique things about sailing in Vancouver is that both the bottom and top of the boat are equally wet.

Anonymous
Guest
Anonymous
3 years 8 months ago

@SDR:

I think a lot of potential renters for the West End are moving to locations in Metro Van within an hour of downtown: Metrotown, Brentwood Town Ctr, Lougheed Town Centre, Richmond, New West. Rental buildings are old in the West End. You can rent cheaper, newer, sometimes new condos in these ‘suburban’ locations I mentioned. Although these suburbs have just about all the urban ammenities you can find in the West End and they are connected by skytrain to each other and to downtown.

Best place on meth
Guest
Best place on meth
3 years 8 months ago

#45

Have you ever combined sailing with golfing or skiing?

I hear it’s very popular in this city.

gokou3
Guest
gokou3
3 years 8 months ago

Re: VMD #40, it would be useful to see how much assessment values have changed for these same properties vs a year ago.

Name taken
Guest
Name taken
3 years 8 months ago

No, Makaya, that is the rent difference for a three bedroom place. The old one was freshly renovated. The new one was brand new- I was the first tenant. And no rent increases since over four years ago.

Name taken
Guest
Name taken
3 years 8 months ago

Just Looking, regarding “while services run by government have had to contend with the challenges presented by Baumol’s cost disease”- as I said, government will keep screwing things up, so expect higher taxes and more government debt. And, by the way, we don’t need no stinking government to sell us liquor, insure our cars or tell us which doctor we can or cannot see. Your and children’s taxes would be substantially lower if our governments stopped screwing with things that don’t have anything to do with governing.

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