BC, debt, economy, mortgage, opinion, predictions, presales, prices

BC teaser loans panned in media.

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259 Comments

The new first time buyer teaser loan program announced by the BC government has met a suprisingly negative reaction in the media, but some online polls show voters approve.

This move seems designed to undo some of the federal ramp back of housing market fuel. Bearvancouverite points out this might help developers who are seeing people backing out of presales agreements.

This might be exactly why Christy did it. Developers were panicking that presales won’t close because mortgage qualifications would be so different in the next few years, they need to dangle a carrot to make sure speculators don’t just walk away and first time buyers can be convinced to take over presales from flippers.

Scoop points out why this program should be referred to as a “teaser loan” as made popular in the US housing bubble:

Definition of “teaser loan” from investopedia: An adjustable-rate mortgage loan in which the borrower pays a very low initial interest rate, which increases after a few years. Teaser loans try to entice borrowers by offering an artificially low rate and small down payments, claiming that borrowers should be able to refinance before the increases occur.

http://www.investopedia.com/terms/t/teaser-loan.asp

Let’s all call start calling this new program what it is: Christy’s Teaser Loan Program.

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Funkey Monkey

Being a bear is becoming main stream.
http://www.cbc.ca/news/canada/british-columbia/1st-time-homebuyers-say-no-thanks-to-b-c-loan-1.3908606

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Newcomer

“We’re not going to buy an overvalued house,”

And that’s all that matters. Nobody ever buys an overvalued house, because prices are set by the buyer and are a never higher than what the buyer perceives the value to be. What does change is the perceived value. And if the perceived value of the market falls (for example, after newspapers run stories predicting double-digit declines) then everything is suddenly overvalued.

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Funkey Monkey

Well said you just have to explain this to Oracle. Even Ham wont buy in a falling market.

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Newcomer

Well, as you know, I do love explaining things to Oracle.

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Abdul Lahazi

Trump picks China hawk to lead new White House trade council.
http://app.tmxmoney.com/news/cpnews/article?locale=EN&newsid=f45326&mobile=false

In a statement, the Trump transition team said the creation of the council “demonstrates the president-elect’s determination to make American manufacturing great again.”
Trump says China’s unfair trade practices are responsible for wiping out American factory jobs. U.S. manufacturers have cut 5 million jobs since 2000. Trump has threatened to impose taxes on Chinese imports and to label China a “currency manipulator” for allegedly pushing its currency lower to give Chinese exporters a price advantage.

The day of the locust is coming to an end.

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patriotz

The manufacturing jobs are not coming back. First world countries cannot compete with Third World countries on Walmart type goods. If imports from China are restricted, some other Third World country will make them. If the US tried to cut off imports from all the Third World (which I highly doubt), China would be the big winner as it would establish itself as the leader in global trade.

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chilled

Patriotdoltz, you were wrong about Trump winning just like you are wrong about this. Do us a favor and STFU and return to crunching numbers at your Statistics Canada job in Ottawa.

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Hyper-mega-Bull

patriotz, stick to nitpicking technicalities that’s what you are good at and how you contribute most to the blog.

leave things that require judgment and understanding of big issues to the people who do that best.

China tycoon moves jobs to US, citing high taxes at home

A Chinese auto glass tycoon has caused a stir by shifting part of his empire to the United States and setting up a factory in Ohio, citing high taxes and soaring labour costs at home.

https://www.yahoo.com/news/china-tycoon-moves-jobs-us-citing-high-taxes-093204655–finance.html‘

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Newcomer

In the long term, as developing countries develop, they will be less competitive on wages and so the cost of manufacturing will increase. When the whole word is earning a living wage, efficiency will determine where things are made.

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Hyper-mega-Bull

my thoughts are that if trump damages china HAM and people flood into vancouver for the final blow-off top.

right now the american sinophiles are trying their best to make russia usa’s enemy #1. i think the american public is generally afraid of angering china so is reluctant to do anything.

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Shut It Down Already

Just wait until all the truck driving jobs are eliminated by US-grown AI.

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Best place on meth

761 33RD AVE E on large lot.

Listed at 1.5 sold after 82 days for 1.12

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YVR

Looks like all those sales rolling in come with a 30% discount. Those holding off to the new year will quickly get a reality check when the realtor runs the comp sales. Here is how the conversation may go:

Realtor: I just run the last sales of 2016 and comps to your house comes in at $1.1M.
Seller: What? My neighbor sold for $1.5 in Spring 2016.
Realtor: That was last Spring. Prices are coming down fast.
Seller: So you think the most I can get is $1.1M?
Realtor: No, that was December. Prices are down more. I suggest ask for $900K.

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Shut It Down Already

What’s your budget?

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fomostyle

Cheap shot. Why make it personal dude?

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Shut It Down Already

If only you’d been here when everybody and his dog was taking cheap shots against Oracle.

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Best place on meth

2035 31ST AVE E

Listed at 1.8, sold after 127 days for1.22

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fomostyle

When

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Best place on meth

Sale was posted Dec 20

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Combat roach

There are still plenty of idiots out there to shell that amount of money for a crapshack that should cost 300K at the best. Insane…

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Abdul Lahazi

and I’m sure they think they got a “deal”!

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Donald T

0.58 is exchanged offshore. Can you do math? Save the 15% racist tax and on the top the regular Property Tax Transfer tax.

Soon, SFH will be selling for 50 cents, and CRA will look the other way.

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Best place on meth

7776 JASPER CRES

Listed for 1.5, sold after 100 days for 1.1

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Oracle

Good news for you guys. I’m going to Hawaii for 11 days! Happy Holidays and Happy New Year! Be back Jan 2nd.

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Best place on meth

And yet you’ll still post 20 times per day, even from a beach.

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Confucius

Merry Christmas and Happy Holidays! Despite our differences, I think we can all agree on wishing everyone a safe and happy holidays!

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chilled

Say hello to Obama for me and give him this;

https://i.sli.mg/Lw1OeR.jpg

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history

http://www.aastocks.com/en/stocks/market/index/hk-index-con.aspx?index=HSI

hong kong overdosing on selling.. watch is on

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ostritch

This loan is nothing like the actual ARM resets that were heavily pushed in the US and given with a 10% predictive increase on the value of homes. You’ll have a tough time convincing me it’s anything the same as I had a friend who lived in Atlanta in 2005 & 2006 and her job at the bank turned into heavy promotion of these loans to the poorest homeowners there. Why do you bears continue to delude yourselves?

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Abdul Lahazi

It’s not an ARM but it has the same effect on the buyer in the future and it will be used by buyers who cannot really afford homes.

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ostritch

It has only that in common with the ARM resets. Not much else. It’s nothing like Marietta, GA and thousands of other obscure neighbourhoods across the entire USA where the poorest people could immediately qualify and pull out 10% of the value of their homes in cash like a giant ATM. These were suckers who were lured by private banks. They weren’t called predatory loans for nothing. 3 years at 3% with a reset at 11%… how is this even comparable, I don’t know. Plus no one is targeting the poorest homeowners. These buyers still have to qualify for their mortgages at the regular bank and at the highest standards in years and in a market with declining prices. Not to mention it’s not a national program and the entire enterprise can easily be offset by the government with the… Read more »

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Just me

Do you seriously think that Christy Clark’s desperate giveaway to bribe viters is actually a serious and helpful program? Can you articulate how it will help people buy, if prices jump by the same or a larger amount at the low end of the market?
Once prices adjust (as they will, since every buyer will qualify) how is that different from a simple increase in debt?

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paulb

New
28
Price Change
9
Sold
80

TI:7510

http://www.paulboenisch.com

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history

Holy Escrement (sh#t), just heard a Christy commercial on Fake TV, about makinfg home ownership more affordable. Next commercial is a British guy tawking about dogs.. bwaaaa

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Combat roach

“Not many people were clear on where he was from, where he was headed, what he was after or what his end game was.”

Lol, everyone knew it was locust laundering money but those in charge had to play the game and act stupid and surprised.

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Oracle

Yup. And those already here with PR continue to launder.

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history

my thinking today is that the Mortgage Broker industry in Canada has been wildly succesful, given the calibre of their members. Their ingenuity has no par around the world. It remains to be seen how they adapt to the last 8 years of Pluto thru Capricorn. We are at the half way point now. If this ingenuity can be flipped to managing Insolvency, these math wonders might be able to survive.

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southseacompany

“Vancouver Condos Got Another (Minor) Downtick In November”, Better Dwelling

https://betterdwelling.com/city/vancouver/vancouver-condos-got-another-minor-downtick-november/

“Vancouver real estate threw some more mixed indicators last month, as the condo market saw stagnated prices, but higher absorption.”

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Oracle

Post from 10 years 4 months ago:

Cashoutnow

Stan-Either I know some of the same people that you know, or there are a frightening number of them out there. I know at least four people that bought this summer before they were ‘priced out’ of the market. I like some of these people quite a lot and wish them no harm, but it takes a special type of ignorance to think that a market can sustain prices that the ‘average’ buyer can not afford. Who buys then?

——————

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Hyper-mega-Bull

LOL!

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Whistler or bust?

Hey Oracle are prices still flat in Surrey?

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Oracle

Pretty much. Detached still up $220-240,000 from 2 years ago.

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Best place on meth

You’ve given up on year over stats and are reaching back 2 years now?

Surrey must be in worse shape than we thought.

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Combat roach

Vancouver’s long-awaited housing correction may be around the corner: prices are headed for a double-digit decline in 2017 as buyers drop out of the market, according to the head of Canada’s largest real estate services company.

https://www.bloomberg.com/news/articles/2016-12-21/vancouver-home-prices-face-double-digit-drop-in-2017-lepage

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space889

Will this prediction be 10th, 11th? 12th? 13th? time lucky charm for the bears?

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Shut It Down Already

The difference here is that people actually listen to the real estate industry’s releases. Them predicting a decline in prices may actually cause it to happen as everybody waits for a lower entry point. This is Bubble 101, surely?

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Oracle

I’m going to be the cynic here. Articles like these are promoting the idea that enough policy changes have been effected and housing is heading down.

In fact, root causes have not been addressed (High, concentrated temp/perm immigration and foreign money). — and please, trolls do not respond.

Furthermore, most of the opposition (“bears”) have bought this false message and are in waiting mode. Unfortunately, prices will barely budge and inventory will stay historically low going forward.

Sure this position can (and will) be ridiculed here but look in hindsight. The 15% foreign buyers tax had little effect on prices under $1 million…and its been 5 months now.

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Combat roach

They said “correction may be…” they didn’t say “it will be” so probably they are wrong as anybody else predicting crash thus far hence everything will be alright and prices will continue to go up at the pace of 15-20% YOY as well as rents, at least in BC. So it really doesn’t matter what anybody said about crash although that ubiquitous huge concern regarding bears being wrong is quite worrisome, why is that so important?

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Funkey Monkey

What did 7 west 38th sell for? it had a for sale sign on it for about 3 weeks but not on MLS went on MLS on Monday now a sold sign.

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Oracle

Transaction funds exchanged overseas. Buyer doesn’t have to launder as much. Seller happy either way. Transactional value reported here locally likely to be tax friendly 😉

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Funkey Monkey

Did you read the question I asked? I’m not looking for conspiracy theories.

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Oracle

Yes. Sorry it’s only a conspiracy theory. My bad.

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Best place on meth

Sale hasn’t been registered yet, says it was listed Dec 15 on mls.

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Funkey Monkey

Thanks im interested.

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Best place on meth

I will post the details when mls does.

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Hyper-mega-Bull

Conservatives call on Trudeau Foundation to ban foreign donations after 10-fold increase in three years

he donation that has received the most attention is from Chinese national Bin Zhang, who, along with a partner, made a $200,000 gift to the Trudeau Foundation after he attended a cash-for-access fundraiser with Justin Trudeau in May 2016.

Bin Zhang is a Communist Party official who helps spread Chinese influence as president of the China Culture Industry Association, a group that is supervised by the Ministry of Culture and tasked with building international ties for Beijing. Other members of the group include senior leaders from the navy, the army, and China’s ruling Communist Party.

http://news.nationalpost.com/news/canada/canadian-politics/conservatives-call-on-trudeau-foundation-to-ban-foreign-donations

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Polozi Scheme

And to these pricks $200k to the government of Canada is chump change when they can buy up Canadian assets by the billions. This city and country is fucked.

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Best place on meth

Turdeau is having private dinners with communists, gangsters and muderers and his foundation is taking their dirty money.

He should resign, this is a low point in our country’s leadership.

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LS in Arbutus

A nice little update from Steve Saretsky. Note average and median prices for detached in REBGV are flat year on year.

http://vancitycondoguide.com/mid-december-market-report/

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Best place on meth

DOW 20,000 here we come!

Bonds and real estate crashing, it’s going to be a fabulous time in Trump World.

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space889

I guess it’s a good thing you feed at the taxpayer trough as a useless lazy gov’t union slacker with job security. No wonder your sense of entitlement is through the roof.

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West Coast Woman

And another high rise high density development will be going in there, just like the one planned for Oakridge. Expect 20+ highrises with 15 to 50 floors.

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Newcomer

Nice!

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fomostyle

And to entirely marketed to mainland Chinese to keep empty.

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Newcomer

Pretty good revenue haul for the city then,

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southseacompany

Translink already took the site through a Neighbourhood Plan process and Council approved a density of 2.5 FAR and building heights of 6-15 storeys back in 2015.

Policy statement available on line:
http://vancouver.ca/files/cov/otc-policy-statement-draft.pdf

The new owners could try to go through that whole process again to get higher densities, but that would not be easy in the short term.

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space889

How do you know they are buying it for short term turnaround? Given that construction and even site prep can be years, why not go through and try to get higher density? Especially if the city is willing to give it in exchange for stuff like low income housing, market rental units which this city desperately needs, and community amenities which the city can’t / don’t want to pay for despite collecting so much proper taxes (well, those green bike lanes, or point gray road closures aren’t cheap!)

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southseacompany

I never said that the new owners were buying it for a short term turn around.

The City just went through a 2 year Neighbourhood Plan process with the public. I doubt that they would be eager to open this up again. Not a certainty, but it would be politically difficult to redo so quickly. Just look at the resistance to density in other neighbourhoods.

Yes, in the long run, the owners may choose to revisit. A site like this may take 10 -20 years to build out. So they could come back near the end and try to get more density/height on a few buildings in exchange for money or amenities. But, as per the city Policy statement, much of the site is low and mid rise, so most of it would be built that way by that time.

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southseacompany

Of course, since Translink was a BC government corporation, the deal could have been tied to density with Translink getting a cut of any increased density. That would get Translink involved in putting pressure on the city to increase density in order to fund the Broadway line.

Not that that is necessarily a bad thing. Let’s see what happens.

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West Coast Woman

City Council doesn’t always consider itself bound by previous planning processes or policy statements.

Prior to the rezoning of the Oakridge site, there had been a neighbourhood planning process for that site, but the City then overrode that policy statement when they later rezoned Oakridge for much taller buildings.

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space889

It is amazing what a few hundred thousands or a $1M campaign donation near civic election time will do to change certain city policies. Don’t we have another civic election coming up soon? But hey, it’s all for democracy! No bribery here!

Also, people participates in those neighborhood planning session. However, how many people actually check up on, and more importantly protest against the changes that were made later on? Often in secret without public notice? I’m going to be not very many.

Lastly, with all the talk about housing supply, lack of affordable housing, lack of rental units, etc. It’s very easy for city to sell density for more rental / affordable units without having to do any actual work, and then take all the credit and call it a day.

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Abdul Lahazi

The real kick in the nuts is that the investors behind this purchase are… *drum roll* … Chinese.

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space889

Heaven forbid that foreigners want to put money into local economy, put a ton of $$$ into Translink pocket, and build much needed housing supply, that will help driving price down.

Unlike say CPPIP, OMERS, who simply buys foreign RE assets, charge rents & tolls, and siphon money out of those countries.

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Polozi Scheme

Chinese help drive prices down? Ahahahahahahahh good one!

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fomostyle

A must watch. #milliondollarshack

https://youtu.be/SBjXUBMkkE8

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Confucius

The solution to fix this blog is a Cage Fight!
Space and BPOM enter, both die, Oracle leaves.

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Best place on meth

Can you throw shut it down in the cage with me as well?

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Best place on meth

As well as a cattle prod, needle-nose pliers, hacksaw and fillet knife.

Thanks in advance.

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Shut It Down Already

You’re so cute, Napolean.

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Best place on meth

I’m 6’1″

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Shut It Down Already

I’m sure that extra inch makes all the difference….

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