BC, Canada, data, hype, prices

Three unaffordable real estate markets, number 3 will shock you!

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83 Comments

Vancouver has just been ranked the #3 least affordable housing market in the world behind Hong Kong and Sydney according to a survey by Demographia.

This is the second year in a row Vancouver ranked third after hitting second place in 2015. The city has been ranked with the worst housing affordability in Canada in all previous Demographia surveys since 2004.

Demographia reported Vancouver’s year-over-year price growth was equal to a year of household income in the city. It also mentioned the city experienced a “modest” net domestic out-migration in 2016, meaning more people left the city than moved in.

Which city do you think those people that left Vancouver are moving to: Hong Kong or Sydney?

Read the full article here.

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bullwhip29

Airbnb pays off Vancouver home price 60% faster than renting: study
http://www.metronews.ca/news/vancouver/2017/01/25/airbnb-pays-off-vancouver-home-price-60pc-faster-renting.html

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No Money Down

“The study, by online real estate sales firm Nested, compared 75 cities around the world and found Vancouver landlords have to rent out their suites for roughly 28 years to recover their investment”

Great payback period

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Newcomer

Ridiculously optimistic. 500 sft downtown runs about 500K and rents for about 1700/month. In 28 years you get 571 in rent before all costs, including strata, interest and property taxes.

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No Money Down

Assume rent increases with inflation

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Newcomer

It get’s you closer, but is that enough to offset costs, most of which will also be increasing? At 2% inflation, we are talking 3K rent in year 28. So, if this were a cash deal, in year 28 you be making a 7.2% return on your money before expenses, which is barely approaching reasonable. And that is only for the final year. As I say, I’d love to see their numbers.

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Newcomer

I would love to see their numbers. I don’t see how you can pay off a Vancouver home with 28 years of renting it out. Maybe they just divide the purchase price by the rent, without factoring in any costs.

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Newcomer

As I suspected the article is totally misleading. The study just calculated the months of rent needed. In Vancouver, they used a 3 bedroom selling at $865,344 and renting at $2,540. That means that 28 years of rent equals the purchase price, but there is no way you could actually pay it off in just 28 years. If you financed it, the rent wouldn’t even cover interest and property taxes in the first year. If it was a cash deal, even without opportunity cost, strata, taxes, maintenance, etc would push it out to something more like 40 years.

https://nested.com/index/2017/global?currency=usd

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bullwhip29

China overtook U.S. last year to become world’s largest cross-border property investor
https://www.biv.com/article/2017/1/china-capital-controls-threaten-overseas-investmen/

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bullwhip29

Don’t let Canada become haven for tax dodgers
https://www.thestar.com/opinion/commentary/2017/01/25/dont-let-canada-become-haven-for-tax-dodgers.html

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southseacompany

“Why did home sales drop in December?”, USA Today

http://www.usatoday.com/story/money/personalfinance/2017/01/24/existing-home-sales-affordability-prices-mortgage-rates/96987780/

“higher mortgage rates and home prices combined with record low inventory levels stunted sales in much of the country in December.”

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southseacompany

From the US:
“Jump in rates doesn’t deter homebuyers, as mortgage applications increase 4%”, CNBC

http://www.cnbc.com/2017/01/25/first-rate-jump-of-2017-doesnt-deter-homebuyers.html

“Mortgage rates moved solidly higher last week, but lenders saw no letup in loan demand.”

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southseacompany

“Comment: Interest-free loans can hurt homebuyers”, Times-Colonist

http://www.timescolonist.com/opinion/op-ed/comment-interest-free-loans-can-hurt-homebuyers-1.8710427

“The latest provincial intervention in the housing market — interest-free loans to first-time homebuyers — aims to help new buyers with their down payments, ostensibly making B.C.’s red-hot housing market more affordable. However, stoking demand for housing without a significant increase in housing stock will likely do more harm than good, rendering Vancouver housing even less affordable.”

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Newcomer

The problem is not stock, but supply. You can increase the stock till the cows come home but it won’t do any good so long as there are speculators to buy and hold them empty.

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southseacompany

“Vancouver Condos Sales Decrease 23.7% In December”, Better Dwelling

https://betterdwelling.com/city/vancouver/vancouver-condos-sales-decrease-23-7-in-december/

“Bubble talk might be impacting sales, as they declined significantly across the GVR. 915 sales were logged through the MLS, this represents a 23.7% decline from the month prior.”

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Oracle

Vancouvers population will be about 70% visible minority within 20 years. We will be a true global city. Abbotsford will rise from the current 25% to 55%. So the entire Lower mainland will be a an Asian–European mix. First in the world. We need to develop possibilities for this mix that will work for the people living here such as: 1) Creation of new country if voters approve via referendum. Or create a state within a state. 2) Ability of residents to live outside the country for up to 8+ months a year while still retaining and receiving benefits. This would alleviate housing pressures. 3) Download care for elderly onto their children. This is expected in many Asian countries and voters will increasingly favour this scenario with their tax dollars. Many exciting new policies ahead. PS. I will stop posting… Read more »

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YVR

That is an awful lot of berry pickers and cab drivers. Do you think you could be looking at a pay cut?

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Oracle

Nope. We will have majority in most parts of lower mainland. Affirmative action!

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bullwhip29

‘Tax haven’ Canada being targeted by offshore cheats, Panama Papers show
http://www.cbc.ca/news/investigates/panama-papers-canada-tax-haven-1.3950552

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bullwhip29

West Vancouver population drop causes concern
http://www.cbc.ca/news/canada/british-columbia/west-vancouver-population-drop-1.3951028

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Newcomer

Vernon. Really? That’s the only place they could find some healthy growth to use as an offsetting comparison. Sheesh.

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Combat roach

Classic Vancouver…

The developer of Trump International Tower and Hotel is suing a local construction company, claiming that shoddy work and poor management of trade contractors delayed the high-profile project.

http://vancouversun.com/news/local-news/trump-tower-developer-sues-vancouver-construction-company-for-alleged-shoddy-work-and-bad-management/amp

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Oracle

Trump in first week has:

Cancelled TPP.
Approved Keystone XL
Reduced immigration (tomorrow)- will ban immigration from hostile countries.

In next few weeks:

Will renegotiate NAFTA
Stop China aggression in South China Sea. (Banning immigration from there is a possibility if tensions rise).

Wow. Putting his people first.

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Bear Vancouverite

Very timely post by Steve Saretsky

http://vancitycondoguide.com/are-we-in-denial/

relevant quote “The peak of the market was in March 2016. Despite (at the time) record low inventories, we set a record number of sales”

Some key takeaways he tries to show with charts:

1) Low sales aren’t necessarily due to with low inventory (debunking an excuse)
2) We don’t need a surge of listings to put downwards pressure on prices. As others have noted here, the sales to list ratio and MOI is far more important than a “surge in listings” which some bulls have recently argued is necessary to result in price declines.

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Oh NO

How many E- W detached sales today?

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Best place on meth

5-2

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No Money Down

Inventory is a lagging indicator-looking in the rearview mirror.

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Whistler or Bust?

Thanks Steve but unlike you who is using a rearview mirror I actually called the top at the time. To the month I might add…

Point #1, #6, #7 and #10 look particularly brilliant when viewed a year later.

http://vancouvercondo.info/2016/02/10-reasons-the-top-is-in-for-vancouver-real-estate.html

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Whistler or Bust?

Go back and read the comments from the bulls one year ago. Quite enlightening.

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Just me

Yes. You do seem to have nailed it. Some of the calls were spot on (eg capital,controls).
One was off: Australia and HK still booming. How long, nobody knows. It depends on what Chins does with outflows.

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Oh NO

Golf clap! Whats your opinion on further detached declines between today and June?

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No Money Down

Mazeltov!, oh and my name’s not Steve.

See comment on Larry’s blog April 3, 2016

“Vancouver, where house price charts look like a penny stock trading on the old VSE.

If this were a penny stock, would make a great shorting opportunity. Sell order under $1.78M, with a stop loss just over the high. First take profit at $1.4M then look to break below $1.2M Perfect setup!”

http://www.yattermatters.com/2016/04/vancouver-average-price-march-2016/#comments

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Shut It Down Already

Er, it’s the bears who anticipate the “rush to the exits”. The “bulls” point to MOI still being firmly into “sellers market” territory at all but the top end (where inventory and volumes are so small that it’s hard to get a meaningful ratio)….. Which is exactly why the bears have ignored MOI since 2012.

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MarKoz

I am trying to figure out what has happened to a home in my neighbourhood. It sold in spring when tear downs around here were getting close to $2 M. It was relisted for sale in December but doesn’t show on any MLS searches or Zolo. The address is 88 (really) East 46 Avenue. Can anyone give me ideas for finding out what it sold for in spring and what it is listed at now?

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BurnabyRes

SALES HISTORY (IN THE LAST 3 YEARS)
03/May/2016 for $1,970,000

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MarKoz

Thanks!

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fomostyle

Canada really needs zillow.

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paulb

New
235
Price Change
25
Sold
81
TI:7568

http://www.clivestevepaul.com

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history

No.3 doesnt shock me, but No.1 does, not because it’s first, but how it’s so far ahead of everyone. Hong Kong homes have a 300, 000 income? Folks, this is HK, all they do here is Broker, work as middlemen between cheap labour and expensive consumer. Exploitation taken to new heights.

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Oracle

Those are Hong Kong dollars. 10x US dollars.

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Buynow or Getlaidnever

Infamous 2348 Oliver Crescent is back on market for $3,288,000.Less than $600,000 less than when it listed for $3,888,000 back in Nov 2016

http://www.rew.ca/properties/R2133315/2348-oliver-crescent-vancouver-bc
http://www.greaterfool.ca/2016/06/11/hitting-the-fan/

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Newcomer

Still a fan of the 8s though. Might I suggest he try $888,888.

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history

next week China One or Oracle will tell us 4’s are showing up in Richmond

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YVR

As ridiculous as $3.28 is for that POS is, at least it is now listed $150k below assessed. People are starting to figure things out but these owners are a little slow. Lets watch these fools chase the market down. By the end of Feb it will be listed at $2.88 but at that point the market will be down more and $2.88 will be a distant dream.

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Chinabuyeverything

It’s already been listed at $2.988 for a long time. Then removed and relisted at $3.288.

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YVR

It was listed for $3.888 in June 2016.

http://www.greaterfool.ca/2016/06/11/hitting-the-fan/

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Best place on meth

“What a piece of crap,” says Leslie, who lives nearby. “This has to be the end…”

Good call Leslie, that actually WAS the top. Possibly even on that very day.

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fomostyle

Worth … $600k

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Best place on meth

2348 Oliver Crescent

Prop. Disclosure SELLER NEVER LIVED IN PROPERTY

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fomostyle

Jesus.

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Combat roach

Definitely better to have HAM students and housewives to stick with Lambos and Bentleys than start driving trucks around…

http://video.dailymail.co.uk/video/mol/2017/01/19/341499445780462014/640x360_MP4_341499445780462014.mp4

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Patiently Waiting

Here’s one for you number crunchers:
https://www.zolo.ca/new-westminster-real-estate/1501-sixth-avenue
https://vancouver.craigslist.ca/bnc/apa/5973919866.html

$2500 rent for a whole house with suite (in a crappy location). Supposedly it was listed and then pulled in Oct-Nov 2016, but there is a sale from 82 days ago. At some point recently it was listed for $968,888.

Flip gone wrong? At the very least, it is someone putting a home back on the rental market. This place would have probably been torn down.

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Funky monkey

Crappy location yes. 2500 to rent a million dollar house not so crappy.

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Combat roach

4 Bedroom + 2 Bathroom
Great for business, considering location and structure – “Massage Parlour & Spa”

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Abdul Lahazi

“You are very welcomed to view the place.” LOL.
That dump won’t rent for $2,500 and the rental house market in Burnaby/New West is slow to DEAD.
“Please fill the application form…” no, sorry but that’s too much work.

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Newcomer

It’s hard to tell from the tiny pictures, but the rent doesn’t sound crazy. The problem is the location. They are likely to get a group of roommates, which is a horrible thing for a landlord.

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history

you know fist hand, of course.

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Newcomer

Well, kind of. Last spring I was looking for a SFH to rent (in the end, we didn’t move) and some of the landlords I met told me that was what they were getting as applicants. To cover 2.5/month, you should make at least 100/year, and there aren’t that many families looking to rent with incomes in that range (I’m guessing most of them have bought). If you have four roommates, it’s much easier, but landlords tell me they don’t like that, because it’s hard to be sure the rent will actually be paid.

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history

your part of the problem, not part of the solution… always remember that

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Newcomer

Sorry. What?

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MarKoz

Ignore him…

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Patiently Waiting

If they are flexible on their “no pets” rule, they’ll have more choices. Looks like a fenced yard. A family with a dog can rent the top floor, and can find tenants for the bottom floor (with landlord approval).

That’s what I’d do if I owned it.

Well actually, I’d just sell it…now.

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Ulsterman

I’m looking now for a rental house in North Burnaby – moving anytime from now until summer. I’m interested that you think the rental market for houses is dead. I too have seen executive houses ($3500-4800) range sitting empty for a couple of months on Craigslist. There are a few older houses in fairly poor condition in the $2500 range, and then there’s a gap up to executive places in the range i mentioned.

Have you been watching the market closely? What’s your impression of where things are going?

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Newcomer

That’s what I see. What do you look at, other than Craig’s list?

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Bear Vancouverite

re: “4643 Dunbar”

You said it sold for $1.8M, but the only listing I could find was for $1.699M, does that mean there was a bidding war of some sort, or why did the unit end up selling for more than the list price?

I ask because I thought the days of “sold over list” were over.

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history

is it cold? .. yeah, godam….
Hows the central heating in that place? or is it some other inefficient breed of gridworship?

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vangrl

Sold over-asking, not surprising as $1.7M on the West Side hasn’t happened since 2015

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MarKoz

Plus it’s a “Charming Character Starter home”.

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Bear Vancouverite

Its true that this is a good price in that area. It still sets a floor as well breaking the stigma of selling under asking .

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Best place on meth

That’s why I didn’t see this sale, my filter starts at 2.5M and up.

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Bear Vancouverite

Cripes, you sure are looking in rich waters.

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Best place on meth

When you set up a PCS account through a realtor you can only choose 1 type of search ie west side houses which you can’t go back and change.

You are also limited to 500 results and since my search was a bit over that I filtered out the very low end as I didn’t want to miss seeing the mega-sales.

PCS accounts are very limited but better than nothing.

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Combat roach

Steal, cheat, destroy to get ahead…

“Lawyers for Yat Ming Enterprises — which runs a seafood market on Kingsway Street — pleaded guilty in provincial court to purchasing the seafood illegally in January, February and March of 2014, according to Fisheries and Oceans Canada.”

http://www.cbc.ca/news/canada/british-columbia/vancouver-seafood-retailer-fined-70k-1.3948569

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Hyper-mega-Bull

Beijing Pushes Back on Trump Admin Over Disputed Islands in South China Sea

“We’re going to have to send China a clear signal that, first, the island-building stops and, second, your access to those islands also is not going to be allowed,” Tillerson said.

Chinese newspapers responded furiously.

“China has enough determination and strength to make sure that his rabble rousing will not succeed. Unless Washington plans to wage a large-scale war in the South China Sea, any other approaches to prevent Chinese access to the islands will be foolish,” wrote the state-run Global Times.

http://www.nbcnews.com/news/world/beijing-strikes-back-white-house-draws-red-lines-over-south-n711401

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Best place on meth

It won’t be a large scale war.

US and Japanese forces send the entire chinese navy and airforce to the bottom of the sea in 4 hours and then go out for dinner.

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Stratahacker

China gonna feel the real pimp hand now.

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Sailor55

That’s what they said about Word War I. “It’ll all be over by Christmas”.

They didn’t say which Christmas, though…

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Shut It Down Already

Yes, just like they did with the Iraqi Air Force.

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The Man

Vancouver City proposes allowing NON-CITIZENS to vote:

“CITY OF VANCOUVER: INDEPENDENT ELECTION TASK FORCE FINAL REPORT, January 2017”

http://council.vancouver.ca/20170124/documents/rr3AppendixA.pdf

From page 23:

“Extend Voter Rights to Permanent Residents.
The notion of the intrinsic equality of all members of a community is important to understand in the context of this recommendation and should serve as a guiding principle for the calculation of voter turnout pending the inclusion of permanent residents in the franchise.”

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Hyper-mega-Bull

CREAM

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