Category Archives: equity

Map of assessment changes from 2013 to 2014

VMD pointed out this interesting zoomable map of assessed property value changes over the last year in Vancouver.

Anthony Smith at HealthyCityMaps created this map using BC assessment data.

At his site you can click and zoom in to see whats happened to values in different neighbourhoods.

Interesting to see how tax assessments vary from micro area to micro area.

Dark purple represents a large increase, yellow is neutral and dark orange is a large decrease from 2013 to 2014.

Screen Shot 2014-01-30 at 10.42.02 AM

View the full map here.

How much lost on a 2009 condo purchase?

Previously we highlighted b5baxters comment on the 19 months that have elapsed since Vancouver home prices have peaked (according to the REBGV home price index)

Of course there are a lot of variables in the housing market, so lets look just at condos, which Crabman has ever so helpfully run the numbers on:

I calculated the bottom line if someone bought a benchmark condo 4 years ago with a 10% DP and a 4% 30-yr mortgage. I took into account all carrying costs, rent savings and principal pay down. I also assumed rent, prop tax and condo fees increased 4%/year.

Oct 2009:
Benchmark price: $380,975
Mortgage balance: $342,878
Equity: $38,098 (10%)
Est. Rent: $1,100
Mortgage: $1,637
Condo Fees: $200
Prop tax: $89
Monthly loss: $826 (extra costs of owning vs. renting)

Oct 2013:
Benchmark price: $365,600
Mortgage balance: $317,253
Equity: $48,347 (13.2%)
Est. Rent: $1,287
Mortgage: $1,637
Condo Fees: $234
Prop tax: $104
Monthly loss: $688

Over those 4 years, equity only increased $10,249. But the extra monthly costs of ownership over that same period were $45,498, so the owner would have saved $35,249 by renting.

So it looks like the current ‘ownership premium’ for someone who bought a Vancouver condo in 2009 is just over $35k.  Anybody see any problems with those numbers?

19 months since the peak of house prices in Vancouver

b5Baxter posted the following comment, an update to prices for the end of November 2013:

REBGV stats are out.
We are now into month 19 since real estate peaked in Vancouver.

We are down 3.54% in nominal terms since the peak and 5.83% in real (inflation adjusted) terms.

If you bought a house in Vancouver in November 2009 (4 years ago) you would have been better off putting your money in savings account (before transaction costs).

In fact if you bought a house back in April 2007 (over 6 years ago) you would have been better off putting your money in a savings account.

So Vancouver Home Prices are basically back where they were in 2007 compared to a savings account.

 

Strata council fraud nets house arrest

George pointed out this this story about a strata council member who bilked condo owners out of $160K.

The moral of the story?  Check your strata documents carefully and don’t accept photocopies of photocopy receipts.

In court Monday, Patrick Au was also given two years probation and ordered to pay back the entire $160,000. He pleaded guilty to theft and fraud over $5,000.

Au was a volunteer member of the strata for Gardenia Villa, a 250-unit condo building near Broadway and Nanaimo Street in East Vancouver.

Over a four-year period, starting in 2001, Au slowly took control of the strata’s finances and started siphoning off funds for his personal gain.

If the name Gardenia Villa sounds familiar, it may be because it’s been in the news before as the unfortunate leaky condo where the repair bill was higher than the construction cost.

Read the full article here.

When mommy and daddy help you buy.

It’s hard to buy your first place.

Thats why more and more parents are chipping in to help junior get their feet in the real estate market.

“The (housing) market would have been much weaker if we didn’t have this phenomenon. There’s no question about that,” says Tal, deputy chief economist of CIBC World Markets.

“I’d say this generation is getting more help than any other generation did, but I’d say they need this help more than any generation, too.”

Interest rates may be keeping monthly payments relatively affordable, but the big issue for young first-time buyers has been coming up with sizable downpayments when the average price of a home in the GTA is now more than $534,000 — more than $850,000 for a detached in the City of Toronto — almost double the $293,000 they averaged just a decade ago.

Saving can be especially tough when many first-time buyers are still paying off student loans and dealing with rents that can run from $1,100 to more than $2,000 a month.

Read the full article in the The Star.