Category Archives: economy

BC teaser loans panned in media.

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.

Can we fix affordability with more debt?

Most people agree that there’s a problem with the BC real estate market, and that problem is usually called ‘affordability’.

Affordability usually means what you’re buying is too expensive, but it can also mean that you just can’t afford the monthly payment.

Interest rates look at risk of rising, but have been at rock bottom levels for years.  That means there’s not much room to move on ‘affordability’ when it comes to interest rates.

So we’re stuck with two options: price comes down or government starts giving away money.

Important announcement” for first time home buyers from the BC government.

Daily Hive says they know what this announcement will be.

Update: They were correct, here are some details:

The B.C. Home Owner Mortgage and Equity Partnership program will provide a maximum of  $37,500 — or up to 5 per cent of the purchase price — with a 25-year loan that is interest-free and payment-free for the first five years.

“The dream of home ownership must remain in the grasp of the middle class here in British Columbia,” said Premier Christy Clark.

The intention of the program is to assist people who can afford the mortgage payments on a new home but are challenged to make the down payment.

The province will start accepting applications for the program on Jan. 16, 2017.

Homebuyers will pay no monthly interest or principal payments over the first five years as long as the home remains their principal residence.

After the first five years, homebuyers begin making monthly payments at current interest rates.

If too much debt got us into this problem, surely it can get us out of it right?

Meanwhile the Bank of Canada is warning again about huge mortgages and growing household debt.

The Tragedy of the $1.2 Million Dollar House

There’s an absolute injustice happening in our fair city. Honest home owners who by no fault of their own now find themselves in the position of owning a home that is assessed at more than a million dollars.  People who have struggled and strived to achieve home ownership only to have the $570 property tax grant torn from their weary hands!

A greedy government is intent on charging these poor home owners property taxes without giving any of it back! The province cruelly raised the cutoff from 1.1 to 1.2 million earlier this year, but what is that? Less than 10 percent! Some assessments are up more than 40 percent! What are these poor homeowners supposed to do- sell and cash in on a hugely inflated market?

Fortunately there are freedom fighters who are advocating for the downtrodden and calling for a rise in the cutoff for the homeowner grants.  Pray that they succeed, because you know if the government succeeds in it’s evil plan to retain this $570 home owner grant they’ll only waste the money on caviar, cigars and saving people from fentanyl overdoses.

Don’t lend money to your real estate agent.

We know the readership of this site has a deep and abiding love of all things real estate so we figure you might need this public service announcement. Don’t lend money to your real estate agent.

Rita Fulciniti put a down payment on a new west-end condo, thinking that home ownership would bring her a little comfort and financial security in her retirement years. Instead, the 66-year-old is living in a homeless shelter, broke, and still chasing the Toronto real estate agent who borrowed her life savings.

In March 2014, Fulciniti’s $42,000 down payment was for a second-floor unit in the Vivid Condos on Michael Power Place near Bloor Street West and Islington Avenue. A year later, while the condo was still under construction, Fulciniti learned her potential roommate wouldn’t be moving into the building.

Fulciniti approached Chaim Smilovici — who also goes by the name Howard Smilovici, and was a real estate agent with Adenat Realty at the time — to find a tenant who would help cover the costs of carrying the condo. It was the beginning of her nightmare, she says.

The real estate agent did find her a room mate (that’s good!) but borrowed $95k (that’s bad!) with an agreement to pay in full plus a $5k bonus and a 12% annual interest rate (that’s good!).  He then lost all her money investing in a nightclub (that’s bad!).

Read the full article at the CBC.

Vancouver House Prices Plunging

Get your hankies out, the unthinkable has happened.

Sellnoworbepricedin4evah shared this article at CTV news about Vancouver house prices ‘plunging‘.

It’s apparently gotten so bad that some houses are now selling for under one million. Horrors! What will become of housing in Vancouver!

Sutton West Coast realtor David Hutchinson has been tracking plunging prices and found several detached homes listed below $1 million, some of which had been recently renovated.

“If you want to sell, you have to be priced sharply, and you see a lot of price drops,” Hutchinson told CTV.

And even with price drops, he added, he’s seen many sale prices lower than what sellers are asking for. He said he knew of one home in the west side of the city that was initially priced at $3.9 million, but when it didn’t sell, the owners reduced the price. They kept reducing it in small increments, but eventually they couldn’t wait any longer, and had to drop the price by nearly $1 million.

Another home on West 8th in Kitsilano was listed for $2.5 million, but could only fetch $1.6 million.

“There’s not this crazy deluge of offers coming in like before, when you could price it below the market value and wait for all the offers to come in. That’s not happening anymore,” Hutchinson said.

“Buyers are being a little more picky now and you didn’t see that before.”

You know what this means right? Deal Time!

Anybody looking for a tear-down in a bad neighborhood for just under a million?

Read the full article here.