FFFA! Rentals, Repairs, Indexes

Hey it’s the end of another work week!

And if you’ve been here before you know what that means: It’s Friday Free-for-all time!

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

Why don’t you buy already?
Marketing! Buzzwords!
Record debt, but no worries
Include transportation costs
And maintenance costs
Toronto beats Vancouver in crazy?
Vancouver island buyer or seller market?

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

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Royce McCutcheon
Guest
Royce McCutcheon
@220: Potential factors to help Vancouverites enter or persist in this over-priced market despite low incomes (off the top of my head): 1) Until very recently, people were able to get mortgages (stretched across very long amortizations) for >10X their annual income. With income fudging or down-payment help (via parents, brokers, or banks themselves), this has been enough to stretch buying power by quite a bit. Multiple reports suggest BC to be the most indebted province per capita. 2) Those ENTERING the market today with a median income and unspectacular down payment are hosed in Vancouver. They absolutely aren’t buying detached houses. But not all transactions involve new buyers (I don’t know the %, but it’s a good minority). Selling at an inflated price in Vancouver can give a large sum and help explain how someone with an unremarkable income… Read more »
UBC in crisis mode
Guest
UBC in crisis mode

Someone may have just paid $9 million for a tear-down in Van West:

5988 NEWTON WD Vancouver V6T 1H7 : University VW
http://vanwest.ca/officelistings.html/details-34792274

The land is assessed at $4,989,000.

Joe Mainlander
Guest
Joe Mainlander

@#220 & 222.

The thing is, home sales over $1 million only make up 10% of total Metro Van sales. It’s the other 90% of sales below $1 million that is driving the market.

2500 homes sold over $1 million in Greater Vancouver.
http://www.vancouversun.com/mobile/business/news/Housing+prices+continue+rise+fourth+quarter+Lepage/9369086/story.html

1600 homes over $2 million sold in Greater Vancouver during 2013.
http://remaxoa.com/14/PR/UE/UE_RPT_2014.pdf#20288645

28,500 homes were sold in Greater Van in 2013.
http://www.rebgv.org/monthly-reports?month=December&year=2013

Come on, do math! LOL
Guest
Come on, do math! LOL
Son of Ponzi
Guest
Son of Ponzi

# 227
I’m sure if you calculated the difference in average house prices of Winnipeg and Richmond/Vancouver West,
the gap would be much larger.

Spell it Out
Guest
Spell it Out

@225 Thanks.

Both have the same % increase but ours have gone up by $320,000 more. We’ve almost increased in the last decade or so by as much the entire price of a detached bungalow in Winnipeg today.

Yet their Median wage is higher than ours.

Im guessing the gap would be even more profound for lager house / plots of land.

realist
Member
realist

@ 222 An Observer

Your analysis is along the right lines. The market dynamics are complex. The traditional analysis is that first-time buyers move the markets, and the rest follows in a closed or at least steady-state system. I see little analysis wherein an exogenous high-end buyer group, albeit a small percentage of the market, is greatly expanding.

I welcome criticism of the above, but please, do not tell me that there is no expanding exogenous high-end buyer group; I live in Vancouver westside!

Aggregator
Guest
Aggregator

@Spell it Out

Here’s the data.

Winnipeg Average Detached Bungalow 2000 – $115,188
Winnipeg Average Detached Bungalow 2013 – $335,274

Percentage Change +291%
Net change: $220,087

Vancouver Average Detached Bungalow 2000 – $287,101
Vancouver Average Detached Bungalow 2013 – $828,250

Percentage Change +288%
Net change: $541,149

I’m not jumping in this argument, but you guys are missing another contributor to price increases that doesn’t even involve official credit, and that is presales. It’s more prevalent then it was in 2000, that’s for sure.

UBC in crisis mode
Guest
UBC in crisis mode

Considering the low household income in Vancouver, it is hard to see if anyone can afford $1 million house (our top 1%?).

Spell it Out
Guest
Spell it Out
@222 I think you are correct. The BIG worry iMO is to what extent, if any, the lower end (cheap credit) condo’s, less expensive East Side / suburban SFH’s have been artificially inflated because the higher end has run rampant for so long. It would be terrible if hard working folk are left swimming considerable in negative equity for a decade or so. Especially as we’ve all be fed this frenzy of real estate info and opinion for so long. The other big cost of course is that families have to live in boxes rather than houses, or move away. I think the sooner we all actually understand this market of ours and get to the bottom of it (no pun intended) the better. and the less potential disaster for Mr or Miss Vancouver Median. That is why the debate… Read more »
An Observer
Guest
An Observer
Maybe everyone is right? Prices under $1 million or so are likely close to 100% fueled by easy credit provided to locals. Prices over $2-$3 million are to a high degree pushed up by foreign money. In the middle you have a bit of both – some of those people who had their “tear downs” purchased for $2 million and they buy something for $1.5 million and some locals at the higher end of the pay scale or with accumulated real estate equity + credit. Now you break that down across Canada and you can see that for just about the entire country the issue has been easy and cheap credit while in Vancouver and Toronto you have higher priced properties being greatly affected by foreign money and trickling down from there along with easy and cheap credit in the… Read more »
Son of Ponzi
Guest
Son of Ponzi

#217,219
the answer why non Asian cities are also seeing price increases is simple.
1. copy cat effect.
2. People moving from higher priced Vancouver and Toronto to lower priced areas, driving up prices.
(a family in my kid’s school just moved to Halifax)
Simpal, folks.

Spell it Out
Guest
Spell it Out
@217 I cannot believe you are citing a percentage tripling of prices in Winnipeg and Regina over a decade as some sort of definitive evidence that Vancouvers similar % increase absolutely must have been totally caused by the same factor – cheap credit availability. So the percentage increase is roughly the same? Agreed. However…..Now do the same calculation in absolute $ dollars and cents. Say for example (non specific figures I haven’t got time to look them up) Reginas median prices have risen from $70,000 to $210,000 within the decade, or tripled as you proclaim. Well that is a $140,000 increase. Now do the same calculation tripling Vancouver! What is your Vancouver answer in absolute dollar and cents terms? $300,000 increase?, $400,000?, $500,000?. Not quite ‘the same’ is it! One things for sure its a lot more money to find,… Read more »
Joe Mainlander
Guest
Joe Mainlander

@214

The fact that building has kept up with population growth and yet prices continue to increase could suggest a few things. That prices rose due to extra non-resident demand is just conjecture unless we have more info. If prices only doubled in Van and Toronto, where asians settle, that would be telling.

But, the fact that prices doubled in all major Canadian cities suggests cities like Van and TO are not unique. And the fact that this nation-wide rise in home prices corresponded with lowering of interest rates and relaxing of CMHC standards suggests that we have experienced asset inflation due to increased access to borrowed money.

realist
Member
realist

@ 216 & other posts above:
Agree that photo record of class comp is readily available for BC schools, universities, schools of nursing, etc. for many decades.

My data from family pics:
1. Public high school,Vancouver westside, 1936; class picture, 43 pupils. Non-Caucasians: 0
2. Public elementary school, Vancouver westside, 1958->64; class pictures of Gr 1->6, class size 26 to 36 pupils, each year a differing sample of ~100 pupils in each grade. Non-Caucasians: 0
3. Private school, Vancouver westside, 1965->66; 365 pupils total. Non-Caucasians: 1 family (2 Chinese siblings).

Royce McCutcheon
Guest
Royce McCutcheon
214 said: “The fact that building has kept up with population growth and yet prices continue to increase suggests there must be extra demand coming from non-residents…” Do you attribute prices tripling in Winnipeg and Regina within a decade to non-residents? Are non-residents responsible for doubling the prices within a decade in Hamilton, Gatineau, etc.? And if it’s non-residents driving up prices why has average household debt for CANADIANS exploded to record levels? Once again: foreign/ immigrant factors absolutely have affected prices here in Vancouver. But over the last little while I have not seen HAM-focused posters here offer a cogent response to the request to weigh the impacts of HAM vs. the federally-engineered housing bubble. When considering the insane cost of living in Vancouver, obsessing over HAM and ignoring the federal government’s role is like obsessing over a mosquito… Read more »
Egg Hunt
Guest
Egg Hunt
Speaking about Westside school’s caucasians and non-caucasian kids, you can visit any public elementary / seconsary schools and confirm by pictures hanged in hallways. I can confirm there are less than 25% non-caucasian on most public schools back in 1980’s. Depending on the area, especially some elmentary schools in Westside, still you see less than 10% of Non-caucasian kids at recent years. (2011, 2012) Some schools (like in Kerrisdale), you can see recent grad pictures are over 70% Asian decent names like Kim, Wong, Huang, Lees, you can see 10 Lees and 10 Wangs in one graduating year picture. Now, I did some reseach for our kid for private / Semi-private schools, Crofton, St Georges, Little Flowers, Vancouver College, St Francis Xavier, non-caucasian (in this samples, Asian) are more than 75%. Stats are avilable from school receptioninists. West Point Greay… Read more »
Interesting
Guest
Interesting

If you go to craigslist “rants & raves” you’ll find that the majority of the posts are racist and anti-white.

From quickly scanning similar sections for some random america cities, you don’t find nearly as much racism. Which is surprising, given the sterotype of USA having severe racial problems.

http://vancouver.en.craigslist.ca/rnr/

crabman
Guest
crabman

@Joe Mainlander –

The fact that building has kept up with population growth and yet prices continue to increase suggests there must be extra demand coming from non-residents…

Joe Mainlander
Guest
Joe Mainlander
All other things being equal, if you increase demand by x but also increase supply by x, then their is no pressure on prices. All other things being equal, if you add x more households to a city, but also build x more dwelling units… no pressure on prices. In Metro Vancouver between 2001-2011 we added 135k new households and built 160k new dwelling units. Certainly, we have met demand… and then some, so all other things being equal, there should have been downward pressure on prices. However, all other things are not equal. Everyone who wants to buy a home has been given an equal amount of access to more borrow more money. More money, but your relative position in the market is not changed as everyone else has the same increased access. This causes asset inflation. That is… Read more »
Hail ya, Hong Kong
Guest
Hail ya, Hong Kong

Feng Shui consultant Mak Ling-ling had a different explanation for the storm. She told the Hong Kong Standard that hail in large areas generally means a warning of an upcoming bad economic or unstable political environment.

“Hong Kong has seen hail many times in history. But hailstorms in large areas, including Guangzhou, Shenzhen and Hong Kong are rare,” she said. “It could be a case of people’s complaints not being heard.” http://qz.com/193476/a-freak-storm-provides-a-possible-preview-of-hong-kongs-extreme-weather-future/

Stat Man
Guest
Stat Man

@ 207 For clarity, you need to point out that the 51.8% VisMin is for the City of Vancouver. For the Metro Van as a whole it was 45.2% in the last census.

http://www12.statcan.gc.ca/nhs-enm/2011/as-sa/99-010-x/2011001/tbl/tbl2-eng.cfm

Royce McCutcheon
Guest
Royce McCutcheon

I woud vote e).

Royce McCutcheon
Guest
Royce McCutcheon

How about we do this as a survey question instead?

Vancouver housing is very expensive. In general, its housing prices are understood to be influenced by two factors:
1. heavy foreign/immigrant investing.
2. reckless federal housing policy.

To what extent (approximately) do you attribute current high Vancouver house prices to each of the above factors?

a) 100% 1, 0% 2.
b) 80% 1, 20% 2.
c) 60% 1, 40% 2.
d) 40% 1, 60% 2.
e) 20% 1, 80% 2.
f) 0% 1, 100% 2.

Son of Ponzi
Guest
Son of Ponzi

#207
51.8%.
that’s a majority.