Archive for the ‘economy’ Category

Vancouver a graveyard for job seekers?

Wednesday, April 16th, 2014

There’s been some discussion lately about the temporary foreign worker program (TFW) and whether Canada needs to import workers, skilled or unskilled.

This of course brings up the debate: companies say they can’t find people to fill positions, workers say thats just because you aren’t paying enough.

Is there something special about Vancouver that enables lower wages to be paid or are is it not true that Vancouverites tend to be underpaid?

Atomic Frog had this to say:

Here are some of the facts that I know of

Highly skilled and highly in demand workers do not stay in Vancouver. You get paid higher in another city and cost of living is likely lower than living in Vancouver. Local companies ALWAYS have problem hiring qualified applicants and if this snowball, they cannot stay in business for very long or be very competitive in their sector. What kind of industry is doing very well in Vancouver anyway these days? Movie industry? Mining? Tech? I work in the local IT industry for the last 20 yrs. I saw all kind of IT ppl who came to town, found a job and eventually left town after a couple of yrs because they had found a much better paying job in another city.

As a result, Vancouver is considered to be a graveyard for job seekers. Even for those who have a job, local salary has been stagnant for yrs. Without a steady stream of local workers who should see their annual salary go up steadily every yr, it is very difficult for this local property bubble to continue.

There are many cases in other parts of the world where property value goes up and stay there. Main reason being foreign investor, but the locals also keep making more money over the yrs. Prices that were higher five yrs ago may not seem to be that high for those cities. However, can we say the same thing for Vancouver?

Do you know skilled workers that have sought better career opportunities outside of Vancouver or are you and your coworkers properly compensated and happy to stay?

Taxpayers funding condo flippers?

Monday, April 14th, 2014

By now everyone knows about the high cost of the Olympic Village project.

Current estimates are that it will cost taxpayers between $400 – $600 million to pay this off.

There are 68 units still left unsold over the last six years, but over at the ‘Canada House’ building it looks like a number of units have been bought and flipped, at least one for more than $400k profit in a month.

Hat tip to Mac who pointed out this article in the Province.

So whats going on here? Should these units have been priced higher or considering the tough sales across this project were they right to unload them quickly even if there were buyers willing to pay more?

Saving is hard.

Wednesday, April 9th, 2014

One of the great things about the Vancouver housing market is that we don’t have subprime lending.  All of our loans are rock solid and even if they weren’t guaranteed by the government banks would still be eager to hand out the same mortgages.

And yet..

If there’s one thing Vancouverites know, it’s that saving money is difficult.

So what are you to do as a responsible first time home buyer who is unable to save up the hefty 5% required to get a CMHC insured mortgage?

Don’t worry, at least one bank has your back: Vancity will match half your downpayment savings on a home priced under $500k.

Still that’s not exactly zero down, since the CMHC scrapped that in 2008, but if saving up 2.5% is still too difficult you may have other options.

But remember, unless you have a poor credit rating this still isn’t subprime.

Apparently it’s gotten harder to get the long term zero down mortgage the CMHC made available in the past, but not impossible.

Renting: The last, best real estate bargain?

Tuesday, April 1st, 2014

Somebody at the Sun has started looking at rent / buy ratios.  

Many Franks posted this in the comment section yesterday:

Barbara Yaffe discovers renting. Contains a few groaners. Renting a place may be the last, best real estate bargain and a majority of the city’s residents are taking full advantage

Vancouver rents have remained reasonable in part because of a 2.2-per-cent limit on annual increases imposed by the provincial government.

NO! Bad Barbara.

In a recent bulletin, [David and Mark Goodman] report Canadian Mortgage and Housing Corporation numbers that demonstrate it’s 32.5-per-cent cheaper to rent rather than own a one-bedroom unit in Vancouver.

“The gap increases considerably once strata fees, maintenance costs and taxes are taken into account.”

WTF kind of buy/rent comparison EXCLUDES strata/maintenance and tax?

Apartment building owners in Vancouver since 2007 have faced a municipal moratorium on the demolition of rental housing stock, and are reluctant to evict tenants in order to do needed upgrades.

Renoviction. When a phenomenon is popular enough to coin its own term, “reluctant” might be overstating the case.

The Goodmans are predicting that landlords of these older, minimally upgraded buildings soon may find themselves confronting tough new competition.

They report as many as 49 rental buildings, with 5,849 suites, could come on stream in the region within the next three years.

And the popularity of renting in Metro Vancouver may grow, says the Goodman Report, because of an increasing wariness about Canada’s possibly overvalued real estate.

“We live in a very special place with abundant resources and continuing investment from abroad,” says the newsletter. But with all the housing-bubble talk, “as a B.C. real-estate owner you’re wise to be cautious.”

Should you just move to an island?

Tuesday, March 25th, 2014

Skook has a post over at VancouverPeak.com about an island dream gone sour.

A BC couple purchased land on Mayne island and started building their dream home only to run into a confluence of cost overruns and real estate market downturn.

Today, their house is only a wood frame shell that looks out over one of B.C.’s most dramatic views, with the Lower Mainland in the distance, and regular sightings of ferries, whales and seals. The tiered wooded lot is only a five-minute drive to the ferry.
It is the idyllic best that B.C. has to offer, and yet the Klingsats won’t even break even on the near $1-million they spent on the property and construction. They have relisted it for $539,000, after previous listings at $649,000 and $699,000 didn’t get any offers. “Everybody loves the place, but the people don’t want a house that’s not finished,” says Mr. Klingsat, who gave up on the project six months ago. “And I can’t do it. I haven’t got any more money to put into it. “The whole economy everywhere is lousy – nothing is gangbusters. There are places for rent all over here on Vancouver island.”

The original article in over at the Globe and Mail. Skook adds some extra thoughts and information.

RFM has also added some information summarizing other properties in that particular island market.  There are 113 properties for sale on an island with a population of 900.

Won’t you please help a hungry house salesperson?

Tuesday, March 4th, 2014

Are you aware of the Vancouver Realtor Hunger Index?

Across the city you’ll see used house salespeople who are having trouble making their german auto lease payments – a decline in the glory days of Vancouver real estate affects us all.

That lost commission translates into a deferred payment to a local auto dealer, who might not buy that extra big ad in the local newspaper.  Will that editor buy his ounce of weed this month?  Will that grow op have the money to expand?

These are the big issues to consider.

Please.

If you’re thinking about buying a house or apartment in Vancouver BC or know somebody who is, your commission can make all the difference.

Just jump in and do it. Now is the time.

The Vancouver Realtor Hunger Index for February 2014 stands at 62%.*

And while thats nowhere near the worst that we’ve seen it, it’s a hell of a lot worse that the halcyon days of 2004 where for two solid months every used house salesperson in the city was fed.

You can help.  Buy a house or condo in Vancouver BC and lets keep this economy rolling.

*A big thanks to RFM for the data. 

Gen Y not buying a lot of Vancouver houses

Wednesday, February 19th, 2014

From the obvious files: expensive homes are expensive.

The Globe and Mail has an article about changing attitudes towards real estate by Generation Y in Vancouver.

Essentially: they are more inclined to live urban and remain mobile.

They also say that Boomers are downsizing into condos.

Ben Smith, VP of sales and marketing at Rennie & Associates, says he’s already seen a major shift in the last six months. This year he’s seen a sudden surge in demand for three-bedroom condos, purchased by downsizing boomers. Those boomers are trading their homes for spacious condos. Those same boomers are helping their kids with a down payment on their own condo, which is the only way a lot of Millennials will ever afford to live in Vancouver.

“It’s exciting, because for years we’ve been talking about this, and we’re finally seeing it happen,” he says. “There is $88-billion worth of clear-title real estate tied up with boomers. In B.C. and Vancouver especially, we are all equity and no income. If you don’t have that down payment, you don’t have a home.”

Read the full article here.

Canada plans to stop selling citizenship

Tuesday, February 11th, 2014

The federal government has announced that they are closing the immigrant investor program.

So how does this wash out with Vancouver HAM-hype?

If prices crash now does that mean that all the salespeople that used ‘foreign money’ instead of ‘in debt locals’ as a justification for high prices were correct?

A source said the government is acting based on data that show that, 20 years after arriving in Canada, an immigrant investor has paid about $200,000 less in taxes than a newcomer who came in under the federal skilled worker program, and almost $100,000 less than one who was a live-in caregiver.

In the past 28 years, more than 130,000 people have come to Canada under the investor program, including applicants and their families.

And what about those ‘in debt locals’?

Turkey shared some interesting numbers on the sheer size of Canadian debt growth:

Let’s start with non-mortgage debt:

Equifax said Monday that its figures show that consumer debt, excluding mortgages, rose to $518.3-billion through the end of November 2013. That was up 4.2 per cent from $497.4-billion a year earlier.

Up 20 billion dollars in a year; the total is 520 billion. That works out to about $15k per Canadian man, woman, and child.

Meanwhile, overall consumer debt, including mortgages, also continues to rise — up 9.1 per cent to $1.422-trillion from $1.303-trillion a year earlier.

Up 120 billion dollars in a year; the total is 1.42 billion. That’s about $41k per Canadian man, woman, and child.

Now the editorializing bit.

High debt levels are not a big concern in current conditions, which signal a stabilizing economy, improvement in the unemployment rate and an anticipated gradual increase in interest rates.

An increase in debt, by itself and without context, is not a troubling sign in an improving economy. It’s the friggin’ size of the thing that’s a catastrophe! These numbers are absurd. Plus, BC’s numbers have traditionally been worse.

TD: Houses 10% overpriced nationally

Wednesday, February 5th, 2014

Somebody over at TD bank looked in their crystal ball and saw interest rates rising.

They say that a combination of factors including increasing supply, softening demand and the expectation of rising interest rates mean that home price across the nation are overvalued by about 10%.

It says markets such as Toronto, Vancouver, Montreal and Ottawa are likely more overvalued than markets in the Prairie and Atlantic regions, and will likely see more of an impact.

The national housing market and worries about a real estate bubble have been key concerns for policy-makers for several years.

Recent indicators have suggested the market may be headed for a soft landing instead of a bubble bursting, but concerns have persisted.

Full article here.

Condo marketer trades used cars for down payment

Tuesday, January 28th, 2014

People aren’t buying condos like they used to and that means marketers have to get creative.

For instance, how would you get first time buyers without much savings to buy in a new building with no parking available?

Trade their old car in for a 2% down payment!

Car for a Condo lets car owners trade in their vehicles towards a condo unit in the gritty but fast-gentrifying neighbourhood just west of Main.

“Cars are a terrible asset,” said Cam Good, president of real estate marketing firm Key Marketing.

“For someone trying to get started in life and wanting to become a homeowner, taking a depreciating asset and literally turning it into an appreciating asset is a life-changing decision.”

The low buy-in of $5,400 is possible thanks to a two-per-cent down payment program offered by Vancity.

It allows qualified buyers to shell out only two per cent of, say, a $269,800 one-bedroom, 519-square-foot unit — although monthly payments will be required over the next 16 months of construction to get the buyer to at least a five-per-cent deposit before the building is completed in 2016.

We’re still waiting for the offer that lets you trade in your used helicopter as a down payment on a new condo in Whiterock or the one that lets you trade in your imaginary foreign investor parents on a new unit in the gritty but fast-gentrifying neighbourhood downtown near the Granville street bridge.

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