Vancouver Condo Info

Look at this garbage. It’s an article submitted by “The BC Real Estate Convention” and printed as if it’s actually news in the Vancouver Sun. First off, the writing is atrocious. Don’t they even have an editor read these advertorials before they’re printed? Second, there are lots of statements presented as fact that have absolutely nothing to back them up:

Experts claim that the Chinese Mainland buyers and investors will continue to seek for overseas investment opportunities, in Vancouver.

Which ‘experts’ are these? Oh never mind, we’ll just take your word for it then.

As it is more cost efficient to purchase a property rather than renting, and considering the long term returns of the investment, purchasing properties in Vancouver become high on demand.

Yeah, somebody is ‘high on demand’ if they really believe that current prices in Vancouver make buying ‘more cost efficient’ than renting. There are many many markets around the world where buying is ‘more cost efficient’ than renting, Vancouver ain’t one of them.

However, as much as Feng shui is a well respected practice by many Chinese immigrants and potential home buyers and investors, there are always those “intelligent” ones that seek to obtain the optimal economic value from their investment in Vancouver’s real estate.

Wow. I don’t even know how to respond to that.

If you go to the The BC Real Estate Convention web site you’ll see that this trade show is sponsored by The Vancouver Sun and Province.

Then there’s this piece over at 24 hours:

Metro Vancouver will receive an influx of businessmen from mainland Chinese this week, intent on spending their two-week Lunar New Year holiday with family, as well as scooping up significant amounts of real estate.

Julia Rowell, sales manager at downtown Vancouver’s Maddox development, said this phenomenon has been going on for over 25 years, but 2012 looks to be especially busy.

Yeah? I think TPFKAA says it best:

HAHAHAHAHA! That’s absolutely hilarious!!

So in 1987, (a full five years before Deng Xiaoping’s reforms that enabled creation of individual fortunes) HAM from mainland China was increasing sales just after CNY.

/facepalm.

The hype seems to be working on the listings side. This year started off with the second highest number of listings in the last ten years and has grown at a faster rate than any of those years, especially on the west side:

I’m sure those sellers are hoping this hype pays off, and maybe it will, but then again maybe our market isn’t driven solely by wealthy offshore buyers. Most local first time buyers aren’t in the market for multimillion dollar homes anyways, so how would this even affect them?

Blaming ‘Chinese buyers’ for out of control prices is simplistic and racist. This city is nearly half asian so of course ‘Chinese buyers’ have an impact, but what about easy credit, low rates, CMHC pumping and local speculators?

Just for comparison, the city of Monterey Park in California has the highest percentage population of Chinese Americans of any US municipality. Here’s what home values there look like over the last few years:

This post was submitted by RTYT.

Mark Carney is making new remarks about some Canadian real estate markets being “probably overvalued“.

It was the second time in recent days that Bank of Canada Governor Mark Carney voiced concern about property prices, which surged after the financial crisis as borrowing costs tumbled.
“We see that in a number of real estate markets in Canada, valuations are at a minimum, firm; in others, they’re probably overvalued. So there are risks there. We’re watching it closely. We’re working with our partners, the federal government, the superintendent of financial institutions,” he said in an interview on “Question Period” on CTV.

“Measures have been taken. They’ve been effective. We’ll keep up that vigilance. If more needs to be done, I’m sure the appropriate authorities will take those measures.”
The federal government has tightened mortgage regulations several times in a bid to prevent a property bubble from forming. Finance Minister Jim Flaherty said on January 17 that the government is watching the housing market closely and is ready to intervene if needed, but is not about to do so now.

Yes, the federal government has tightened mortgage regulations “several times”.. Here’s a timeline of those changes courtesy of Burbs Boy:

Jan 2006 – Minority Conservative Government elected
Feb 2006 – 25 year increase to 30 year on test basis
Jul 2006 – 30 year test affirmed and also increased to 35 year
Jul 2007 – 35 year increase to 40 year
Oct 2008 – 40 year decrease to 35 year
Mar 2010 – 35 year decrease to current 30 year

This post was submitted by wreckonomics.

Someone over at the Vancouver Courier is of the opinion that foreign buyers have driven up the cost of real estate in Vancouver.

Of course, capitalism requires competition, and free market principles should drive our housing market. But we no longer control that market. And despite growing evidence of market dysfunction, Premier Christy Clark, who could stiffen provincial regulation, and Mayor Gregor Robertson, who could increase taxes on foreign property owners, cede our land to foreign buyers.

Not so in Australia.

In recent years, Australian cities have experienced Vancouver-style real estate booms, with housing prices soaring from Sydney to Melbourne. Like here, buyers from China help drive Australia’s speculative real estate market. Faced with mounting public pressure, in 2010 the Kevin Rudd government introduced strict regulation aimed at foreign ownership. Under the new rules, the Foreign Investment Review Board (FIRB) screens foreigners (including temporary residents and students) to determine their land purchase eligibility. Foreigners can’t buy existing properties and must build on vacant land within two years of purchase or face government-ordered sale. Scofflaws face capital gains confiscation. Finally, before foreign homeowners leave Australia, they must sell. No more overseas landlords Down Under.

Full article here. Is it time for BC to start looking at regulating home ownership and foreign buying?

This post was submitted by Spork.

According to Paulb Monday was our first day of over 400 new listings in 2012:

New Listings 428
Price Changes 64
Sold Listings 65

Know how many days in 2011 had more than 400 new listings? None.

And look what’s happening in Richmond courtesy of Inventory.

Richmond Jan 3-16
New Listings 534
Price Changes 77
Sold 86

Some interesting things happening in this market early on in the year. The worst january in the last 10 years was in 2009 which saw a 20% sales to list ratio (we usually see at least double that).

BC Assessments are available for viewing for a limited time. These are based on sales at and around July 2011. A little bird told me a few people are getting some interesting increases in the mail. Given our collective nous, perhaps we can figure out which property types and neighbourhoods are going to see some marked increases in property tax outlays this year and give some guesses as to how much. Remember that the City of Vancouver uses 3 year averaging and that it’s the assessment value relative to all other properties, not the absolute value, that determines property tax outlay. As well there has been a shift in property taxes from businesses to households, something that is slated to end this year. One might think that a few households are going to be rather upset if redistribution were to continue.

I haven’t looked at the numbers yet but my guess is that detached houses, especially in west side neighbourhoods, are going to see the biggest tax rise this year, with condos seeing the least rise.

There are a few banks out there making noise about the Canadian housing market. Let’s see, what are their names again? Oh, here they are.. Some place called CIBC and Royal Bank and then one called Toronto Dominion. They seem particularly concerned about the market in Vancouver and Toronto.

CIBC chief executive officer Gerry McCaughey told analysts and investors in Toronto that the housing market is “leaning heavily into an area that might be peaking,” and instead will begin to soften.

His comments came as the heads of Royal Bank of Canada and Bank of Montreal also expressed concern over cooling housing prices, particularly in the condo markets in Toronto and Vancouver, where capacity is significantly overbuilt.

And from the second link:

British Columbia is forecast to have it worse, said senior economist Jacques Marcil, and will likely see “a signifcant correction” this year. Indeed, he said in a report today, the Vancouver market likely peaked last year.

The report, which examined the country’s provincial economies, projects home resales in British Columbia will sink 3.7 per cent this year, while prices decline 3.5 per cent.

This post was submitted by Eddie.

Monday was a strange day for Real Estate in Vancouver. It’s normal this time of year for listing to outnumber buyers as people who haven’t managed to sell relist their property, but the ratios paulb just posted are mindboggling:

New Listings 376
Price Changes 56
Sold Listings 43

And as he also points out, the Westside is nuts:

New Listings 96
Price Changes 10
Sold Listings 5

Yes, that’s right. 96 new listings on the west side of Vancouver on one day and only 5 sales. Any idea whats going on here? Were there so many listings that all the sales didn’t get entered, or did we really just have crazy sales/ list ratio day?

And if your in the mood to contemplate dramatic numbers check these out, courtesy of McLovin:

Buddy got his assessment in Kelowna. He owns a 2 br condo with great view of the lake in the Skye building. Paid $660,000 presale in 2007 incl GST. Took possession in 2009.

2011 Assessment $631,000
2012 Assessment $541,000

Drop of 18% in 1 yr and over 20% from his presale purchase price in 2007.

Truthfully, if he had to sell the place he would be lucky to get $500,000. So he is down about 25% and there is no bottom in sight.

As Makaya points out:

to put things in perspective, assuming your buddy took possession exactly three years ago and sold it today for $500K, he has “lost” $4,444 on his house every month. I hope he’s making a good salary to compensate.

This post was submitted by Karl Marx Carney.

Breath easy my friends, Vancouver Sun says no second recession in 2012:

The Conference Board of Canada, for instance, ruled out a double-dip recession for Canada, although it qualified the forecast, noting that it relies on the assumption that the European Union will successfully resolve its sovereign debt problems

BMO slightly more pessimistic, but still 60% no problem!

BMO puts the odds of the U.S. slipping into recession next year at roughly 40 per cent with depressed consumer confidence and ongoing foreclosures. A financial shock from Europe could tip the U.S. economy over the edge.

RBC thinks we should have kept the HST:

Royal Bank of Canada noted in its provincial outlook that the rejection of the harmonized sales tax in last summer’s referendum has added to the down-side risk in its forecast as the return to the provincial sales tax and the shift of the tax burden to business could slow the pace of business investment and job creation. RBC has lowered its growth estimate for 2012 to 2.3 per cent from an earlier forecast of three per cent.

But on a bright note we get those seaspan jobs!

Seaspan’s federal shipbuilding contract and the provincial government’s commitment to bring new mines into production should boost B.C. employment; how-ever, these will take time to materialize. Nevertheless, resource industries hold the most promise for robust growth for the rest of this decade with the greatest share of benefits skewed, for a change, to northern regions of the province.

Now which of these forecasters was most accurate going into 2008?

This post was submitted by Scott.

A very sensible forecast from Tsur Sommerville:

“We start off by saying I have no idea,” Somerville told the Georgia Straight in a phone interview. For him, forecasting is a risky business because “you’re wrong more often, even if you’re intelligent”.

An economist who earned his PhD from Harvard University, Somerville said that he prefers to evaluate what others have projected for the new year.

“The general trend seems to be that it’s going to be a slower market than 2011, and I think the combination of lingering economic unease and uncertainty is consistent with that,” the UBC academic explained. “The other thing is 2011—if you take away Richmond, the West Side [of Vancouver], and West Vancouver—was not some amazing prices-going-through-the-ceiling kind of year. In general for most places, things are going to look like 2011. Maybe a little bit slower.”

Asked about the biggest risk to the market, Somerville responded: “The economy, the economy, and the economy.”

Full article in the Georgia Straight.

This post was submitted by Karl Marx Carney.

There are new strata regulations in BC, here’s the PDF and here’s an article with an overview:

In October 2009, the B.C. government passed the Strata Property Amendment Act, Bill 8. Under the act, many of the changes taking place were to be introduced by implementing regulations. Unlike Bill 8, which required the approval of the legislature, regulations are approved by provincial cabinet as an order in council. Within Bill 8, there were provisions that affected long-term planning and information certificates. Part 15 of the bill, applied to long-term planning, has just been adopted through the regulations as mandatory depreciation reports.

A depreciation report is basically a planning tool used by property owners (the strata corporation) to clearly understand what the strata is responsible for maintaining and repairing as part of its building system (a physical component inventory); the age of the building system; the projected life expectancy; when it should be planned for renewal; what it will cost when the time comes to renew the component; and how the strata will pay for it.

The new regulations provide a two-year window for strata corporations to comply with the mandatory requirement – by Dec. 13, 2013. Strata corporations of less than five units will be exempt, and strata corporations of five strata lots or more that wish to be exempt from the requirement must essentially pass a ¾ vote at an annual or special general meeting for each one-year period the depreciation report is required to be obtained.

Read the full outline in the Province newspaper.

This post was submitted by jeff.