Vancouver Condo Info

Local developer Ian Gillespie is experimenting with the idea of building a downtown condo that is affordable to a couple making minimum wage. The tower would be located on Cordova between Gastown and the Downtown Eastside. To keep costs down it will feature simple finishes, no parking, and owners would do their own maintenance instead of paying strata fees to cover repairs. To try to keep out speculators and flippers they will require the units to be owner occupied.

The 108-unit project is a collaboration involving Vancity credit union, Habitat for Humanity and a Downtown Eastside housing group. Habitat will get four condos suitable for families in the building and will choose who gets them. Another eight units, to be managed by the PHS housing society, will go to local community workers.

The remaining 96 condos will go to buyers who will have to prove that they plan to live in the units and who agree to do some maintenance themselves instead of just paying standard condo-maintenance fees. According to the material submitted to the city, nearly three-quarters of the condos will sell for less than $300,000, and more than half will be affordable to people making between $29,000 and $36,000 a year. That’s the income of an individual earning $15-$19 an hour, or a couple in which each partner makes the $8-an-hour minimum wage.

One interesting point: one of the reasons they can build this condo development for cheaper is because the land got cheaper:

The land, previously owned by developer Robert Wilson, was repossessed by Vancity last year. He had purchased it for $7.9-million in July, 2007, shortly before the city’s real-estate market deflated. It’s now assessed at $5.4-million.

Read the full article in the Globe and Mail.

Inventory shared some interesting data with us on Friday:
sales numbers going back to 1995.

Sales numbers for this month up to last Friday continue to be very low, almost reaching back to their 2008 lows, except when it comes to new unit sales, which are lower percentage wise than we’ve seen in the last 15 years. As of Friday new units sales are down at the 25% level.

The REBGV stats for June 2010 are now available. If a month ago was a good time to buy some Vancouver real estate, than right now is an even gooderer time! If you were shopping for the benchmark home a month ago, you can now buy that same house and get a FREE CAR with it! Best Place on Meth pointed out some of the more dramatic drops and we’ve put together this handy guide for suggested cars you can get with the price difference.

The overall REBGV benchmark price for all housing in all areas is down just over 1 percent which is a little over $10k. You’re not going to get a brand new car for that much, but you could get this sweeeet 1992 Toyota Supra replete with go-fast fin and still have enough left over for a great little road trip:

The big drop for the month was in the benchmark house price on the west side. You’re not going to want to drive that supra up to your west side bungalow, but with about $90k extra to spend you can arrive in style with this 2005 Aston Martin DB9:

The dramatic percentage drop prize goes to West Vancouver Apartments, where the one month drop saw a loss of $77,664 or 11.5%! Go pick yourself up an apartment and a 2007 Maserati:

Crashcow pointed out that there’s even more drama in the West Van Apartment benchmark if you go back another month to the April Peak.

Canadian Mortgage Trends has an article about getting your mortgage approved before prices fall.

When home prices do fall, it makes it tougher for certain people to qualify for a mortgage—especially for refinances. When prices start dropping, appraisals come in lower, insurer valuation systems become more conservative, and lenders tighten up in general.

Vince Gaetano, a broker with Monster Mortgage, tells the Financial Post that people are already trying to get approved “before there is a correction in the real estate market.”

Of course prices may fall in the rest of Canada, but we all know they won’t fall here in Vancouver right guys?

US incentive programs for home buyers have expired and it looks like the real estate industry hasn’t got enough momentum to lift the US economy. Even with rock-bottom interest rates the industry is slumping.

WASHINGTON – Homebuilders are sending a message: They won’t be able to contribute much to the economic recovery now that government home-buying incentives have vanished.

Home construction and applications for building permits sank in May, overshadowing favorable reports on manufacturing and wholesale inflation.

Fewer homes mean fewer jobs. Construction fuels a broad swath of industries across the economy. Yet double-digit unemployment is among the main reasons people have passed on buying new homes.

The solution is simple. Government must take on more debt and pour more stimulus dollars into the economy, then the problem will be solved and everyone can get back to living the good life.

Over at the LA Times Walter Murch and Lawrence Wechsler make a convincing argument that it’s time to retire the term ‘bubble’ when it comes to speculative excess:

The word “bubble” just has an inescapably happy feel to it, conjuring up kids and parties and sudden iridescent poppings, screams of laughter, the giddy clapping of happy hands and an overall lack of consequence. That was fun; now where’s the cake?

Even more so when the word gets paired with “tulip” or “South Sea.” Where could the harm possibly be in such blithe and fragrant things? Certainly not in the words themselves: exotic petals, swaying grass-skirted maidens, spheres of trembling insubstantiality.

So what do they suggest as a more appropriate term?

What if, instead of that playful word bubble, we tried something a bit more accurately descriptive when growth at any cost became the goal. Say, “tumor”: “the dot-com tumor,” “the subprime tumor,” “the derivatives tumor.”

Would anyone seriously gainsay the highest possible vigilance over the proper functioning of their own body or doubt the need for strong regulation? Who, facing the prospect of a tumorous outbreak or living with a body demonstrably prone to such outbreaks, would entrust that body to a band of physicians blithely committed to laissez faire regarding these fatal bubbles of flesh?

Words matter. Metaphors frame thought. Pay them heed and tend them well.

Read the full editorial over at the LA Times website. The Vancouver housing tumor?

Surprisingly affordable to lease retail space that is. Colliers has released their global survey of retail space lease rates and the most expensive places in Canada are in Toronto and Montreal at about $300 us per square foot.

Robson street in Vancouver came in 51st in the survey at a surprisingly affordable $196.08, which looks even cheaper when compared to what I like to refer to as our ’sister cities’ New York and Paris (which are cities just like Vancouver, but bigger with more money.) Both those cities topped $1,250 per square foot, but then they don’t have the HST.

The BC Real Estate Association has generously released to the public their market forecast for the near future so that all investors may partake of their wisdom. As they look ahead, they see a slowdown for 2010 before sales grow again in 2011. Even closer to home this is what they foresee for Vancouver:

For Metro Vancouver, sales are forecast to drop 7.9 per cent this year and rise 4.5 per cent in 2011 to 34,900 units. Prices are expected to increase 10.7 per cent this year in Greater Vancouver to $655,900 and 0.4 per cent in 2011 to $658,800.

For prices across BC the BCREA is predicting a rise of 6% this year and 1% next year. Evidently they use a different brand of Crystal Ball than the Canadian Real Estate Association:

..a survey by the Canadian Real Estate Association (CREA) released last week forecast that prices would rise 2.3 per cent this year to $476,900 before slipping back 3.5 per cent in 2011.

The CREA survey also predicted that sales across the province would decrease almost six per cent to 80,000 transactions this year.

Read the full article over at the Vancouver Sun.

Woodrow pointed out this excellent article over at News1130.com on how to get a good deal with these new high interest rates. Here are a couple of gems:

The easiest thing to do is to put down a larger down payment, which will help you pay less interest over the life of your mortgage — or make payments weekly or bi-weekly.

Well that’s easy! Just put down more money! But what if the credit card companies won’t let me take out another cash advance? Do you have any other advice on how to save money on a mortgage, perhaps in a jumbled form?

Bank of Montreal’s Carolyn Heaney says within in the next couple of years we’ll see more increases in the prime lending rate, so people may want to consider a fixed rate mortgage. “Let’s say we take an average 30 year and reduce it to 25, how much interest can we potentially save off on a $200,000 mortgage? The answer to that is roughly around $53,000.”

Heaney explains another thing people can do is cut their amortization by five years, from 30 to 25. She says potential homeowners can save over $50,000 on a $200,000 mortgage.

..Perhaps we’re all just too busy flipping condos to edit the news?

Tickets are still available to the Vancouver Real Estate Roller Coaster. Critics are calling it the Summer blockbuster that’s not to be missed!

“..a useful image when thinking about asset prices in general today and always. Human behaviour and leverage drive our asset price cycles. If we always keep the roller coaster image in mind, we will never be able to relax and fall asleep after a period of very steep climbs; nor will we be as inclined to throw in the towel after a period of very steep falls.”

Danielle Park – Juggling Dynamite

“..a wonderful illustration of financial storytelling. Metaphor can be a wonderful tool, the reason this one works is that it takes an over used cliché and makes it real.”

Stewart Marshall – Financial Storyteller

“A vomit inducing ride.”

The Georgia Straight

“The only thing I had a problem with is that [it implies] what really is going to happen is we’re going to fall off the roller coaster and sink into the water. Investments are volatile. If you want low volatility then buy low-volatility GICs.”

Tsur Sommerville – UBC Center for Urban Economics and Real Estate