FFFA! Economy, Moving, Morale & Helicopters!

It’s that time of the week again!

Its Friday Free-for-all time!

This is when we do our regular end of the week news round up and open topic discussion thread for the weekend, here are a few recent links to kick off the chat:

City employees low on morale
Canada Bubble about to burst?
Too late for warnings?
Harpers investment advice
Interprovincial migration by age
You need $2.3 million to retire
One persons move away experience
Advertorial brings back helicopter meme

So what are you seeing out there? Post your news links, thoughts and anecdotes in the comments below and have an excellent weekend!

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jesse
Member

One or two mumblings about a soft patch in the rental market. Not sure if this is true, but rent growth in 2013 was relatively slow, and the rent control with very low inflation is low as well.

Something to keep an eye on; the rental market has been strong in recent past years.

Rent$385
Guest
Rent$385

We have been consistently looking at rental units in Burnaby/east van since Sept. Rental rates vary greatly and it’s ridiculous what some people think they can get. I think there is a lot of supply on the market, more than “normal” but I don’t have stats on that.

If you want a giggle, check this rental ad out: http://vancouver.en.craigslist.ca/van/apa/4296471347.html (moldy bathroom, water damage in the kitchen, they are dreaming if anyone will pay $1350 for that!)

Rent$385
Guest
Rent$385

I know this report is now a few days old and everyone that reads this blog consistently has already seen it, but JIC, here is yet another report on how unaffordable Raincouver is: http://www.vancouversun.com/business/real-estate/Vancouver+city+world+unaffordable+homes/9413472/story.html

Dave
Member

Rent$385… the vacancy rate in Vancouver is almost non-existent. It’s about 1%. Compared to pretty much everywhere, that’s extremely low. It’s so low that bidding wars are occurring for rental units.

Johnny-boy
Guest
Johnny-boy

Lots or rentals on the North Shore. Furnished or not. Basements suites are locals trying to pay their mortgage.
Whole houses are HAM who have bought lock stock and barrel including all the old furniture from the previous owner and will rent it with that furniture. Usually after a few months they realise that no one wants to pay top dollar to live with scratched second hand furniture, they will offer it unfurnished too.

They used be super firm on the price too. You lose face if you drop give in on your price too much, but now I see them dropping stuff that has sat empty for six months.

Bull! Bull! Bull!
Guest
Bull! Bull! Bull!

how’s the Australian housing “bubble” going? Hong Kong bubble? China bubble?

Softy
Guest
Softy

“It’s about 1%. Compared to pretty much everywhere, that’s extremely low. It’s so low that bidding wars are occurring for rental units.”

No one believes this.

Funkeymonkey
Member
Funkeymonkey
My bidding war was that I bid lower than ask then got my rental. My suggestion is you go for a walk in any east van nabourhood I see house for rent signs on at least one house/apartment on every three or four blocks. Also is the laneway house still for rent on 41st and nanimo I don’t know what they were asking but it had a for rent sign on it for at least a couple of months maybe it still does. The last time I was looking for a rental about 5 years ago I could not find anything. Things are different now. I also think why rents dont go up relitive to house prices is because people are more sticky on what they will pay for rent compared to a mortgage. Also wages are not very high… Read more »
gokou3
Guest
gokou3

Lots of rental ads for the coquitlam centre area especially at the handful of newly completed condo high-rises.

M
Guest
M

The Canadian economy is under performing the US because of an extremely overvalued housing market that serves as a drag on the economy. Imagine living somewhere with housing only taking 25% of your income instead of 50-75% how much financial flexibility that will give you? After all a house is not worth an infinite amount of money as many in Vancouver think, regardless of the so called fundamentals.

Bull! Bull! Bull!
Guest
Bull! Bull! Bull!

@M

but according to people on this blog, vancouver has no economy other than housing. so instead of paying 50%-75% of income for housing the alternative isn’t 25% of income, the alternative is not having an income.

Son of Ponzi
Guest
Son of Ponzi

Rental shortage.
What rental shortage?
Our landlord offered us a four year lease with no rent increase.
But we opted for month to month. Like the freedom!

alexcanuck
Member
alexcanuck

5 years no rent increase, from an already low price for a big nice suite. Especially with so many marginal FTB’s jumping in way over their heads (once they realize it…) there is a growing pool of would-be landlords chasing a shrinking pool of renters. Good tenants are few and far between, once one is found they are treated like gold!

When an owner is desperate for enough revenue to at least cover 1/2 their monthly outlay and try and maximize the rent, they tend to get even farther behind by needing to forgo three or more months rent trying to get the non-paying deadbeat out, then another empty month repairing the damage at their cost. Repeating that twice a year would get pretty tiresome!

squeako
Guest
squeako
“Lots or rentals on the North Shore. Furnished or not. Basements suites are locals trying to pay their mortgage. Whole houses are HAM who have bought lock stock and barrel including all the old furniture from the previous owner” Probably a lot of truth in that. I am not needing a rental (already renting a nice little place, that amateur landies cannot/want not to compete with, rent wise and qualitywise)but I look now and then to see what these jokesters are coming up with, and it is not much. My last landlord, after I handed in my “resignation”, all of a sudden was willing to accommodate a number of things, asked me what she could do to make me stay… I think this speaks about the mindset many amateur landlords possess, try to milk to get as much as possible,… Read more »
minotaur3
Member

“I also think why rents dont go up relitive to house prices is because people are more sticky on what they will pay for rent compared to a mortgage.”

Rents are sticky because you have to pay it with money you actually have. As opposed to buying a house with money you don’t have (mortgage).

Atomic Frog
Guest
Atomic Frog
With BC losing ppl to other provinces (maybe the US too), I assume that most of these ppl are renters. It is a lot tougher for landlords to sell their property and take a big inflation adjusted loss on a property now in Van just to leave town. The demand side of the rental equation goes down. My mortgage consultant friend told me that many locals just cannot afford to pay their mortgage w/o renting out their basements. Assume that most locals who bought in the last 12-18 months HAVE to rent their basement out, the supply side of the rental equation goes up. Supply goes up and demand goes down. That is a perfect scenario for renters. As soon as the basement vacancy starts to go up, many locals who becomes landlords will have no choice but to lower… Read more »
Turkey
Guest
Turkey

@Atomic Frog,

My mortgage consultant friend told me that many locals just cannot afford to pay their mortgage w/o renting out their basements. Assume that most locals who bought in the last 12-18 months HAVE to rent their basement out, the supply side of the rental equation goes up.

This is exactly it, except the time frame is longer than 12-18 weeks. For years now, ownership math required people to be delusional about rental incomes. They can remain delusional throughout the process of buying their home, renovating the basement, and all the way through the first six months of ownership. They are then given a long, slow, personal keel-haul across the belly of the good ship Reality.

Many Franks
Member
Daily living expenses driving B.C. consumer debt… “Across all the demographics it was actually the same, it was over extension of credit,” he said. “It was basically that people got too much credit, it accumulated over time, and when we delved a little bit deeper it was all about daily costs that they were putting on credit cards.” […] According to Mantin, B.C. now has 1.5 times the rate of consumer debt as the rest of Canada and government often “talks out of two sides of their mouth” on the issue. “On one side it’s the consumer that’s always looked to to get us out of these recessions and ‘the consumer needs to keep spending,’” he said. “Then, on the other side, the government is now very concerned about household debt.” So much for the proposition that we should all… Read more »
mac
Member
mac

Rents in downtown Vancouver, Kits, Fairview, Pt. Grey, Main. Mount Pleasant are hugely high and vacancy is low. Period.

franko
Member
franko
Just want to set things straight before one of our flaming optimists checks in to gloat about the recent decline in bond yields. Two reasons: It started with last month’s dismal jobs report in the US, that was thought to be bad enough to possibly slow down or delay the FED’s “tapering” program. Those jobs reports can be all over the map, and it’s not unusual for them to be totally off the track, especially in winter. Today’s decline in bond yields was entirely due to fear of currency illiquidity in emerging markets that will find it difficult to cope without continued stimulus to the US economy. That may continue for another week as US treasuries are the safest temporary place for money fleeing global equity markets. Both reasons are anomalies. Nothing has changed. Bond yields and int rates will… Read more »
phillip
Guest
phillip

Exactly mac.
People are saying I am not paying huge rent but when you ask where do you live you get for anwser east burnaby, chillawac, Well that is not vancouver.

space889
Member
space889

Hey, doesn’t all those purchasers also need to pay mortgages out of their monthly income like renters do? I don’t think you can have 100%+ mortgage to disposable income ratio for very long.

The only difference really is that renters in general tend to be lower income, and less willing/able to pay a higher percentage of income towards housing. It really has nothing to do being able to borrow money or not. No bank is going to lend you $500K+ mortgage if you can’t afford the monthly payments.

Turkey
Guest
Turkey

@philip,

Exactly mac.
People are saying I am not paying huge rent but when you ask where do you live you get for anwser east burnaby, chillawac, Well that is not vancouver.

I pay $1500 for a renovated 3-bedroom top floor with a view. I have friends who get better value than I do, just as close to downtown, and who have moved more recently than me.

It’s a bit absurd to hear people claim I don’t exist.

phillip
Guest
phillip

Since you have not said where exacty your 3bdr is I found 3bdr for 1400 in friking pit meadows? Is that vancouver? My ass.

http://vancouver.en.craigslist.ca/pml/apa/4292133849.html

Rent$385
Guest
Rent$385

space889, phillip

I rent @ 22nd and Boundary – so not exactly downtown Vancouver. Here a 2000 sq ft detached house is ~ 850K (often more) and suites rent for ~ 100$ per month for 100 sq ft. If you were renting the top and bottom of a house, maybe you’d get $2400 for the combined suites, but you can find 1600 sq ft rentals for < $1400 a month (where the "owner" is living in the tiny basement).

At best, that's a price to rent ratio 850/12*2400 = 29.51. At worst, maybe 850/12*2000 = 35.41.

Really folks. It's shocking.

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