Archive for the ‘hype’ Category

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.

What will the CMHC announce?

Wednesday, February 26th, 2014

Who wants to play ‘guess the future’?

Apparently the CMHC is holding a conference call at 10 am EST on Feb 27th.

Some rumours are saying privatization, though it looks like most everyone agrees that would extreeeeemely unlikely at this point for a few reasons:

-Privatization would require the finance department
-No one in their right mind would take on the debt

But that doesn’t mean you can’t guess at what is going to be revealed tomorrow!

So what do you think the CMHC will announce? Privatization? Tougher underwriting standards? Branching out into commemorative figurines? A new special expert task force comprised of Brad Lamb, Bob Rennie and Angelo Mozilo?

What’s your best guess at what the CMHC will announce tomorrow?

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.

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.

Down is the new flat in Vancouver and Victoria

Monday, January 6th, 2014

A ‘flat’ market sounds good right?

Not too up, not too down, but just right.

It means if you buy a condo now you won’t have to suffer the indignity of someone buying the unit upstairs from you for $100k less in the future.

So flat is comfortable and we’re starting to see that word a lot more these days.  This article uses it in the headline: Vancouver condo market stays flat.

So you might be surprised to read the following directly under that headline:

Although Vancouver has a reputation as one of the most expensive cities in North America for housing, condo prices stayed flat or even dropped last year, according to recently released assessment numbers.

That follows several years of the same pattern, which means overall condo prices are now seven to eight per cent lower in inflation-adjusted dollars than they were at the recent peak of the condo market in 2009, says one analyst.

Meanwhile in the capital city they’re using the same word: Flat forecast for Greater Victoria home prices.

And here’s what they say:

Although the number of homes sold for the past year rose by four per cent to 5,998 from 5,747 in 2012, the benchmark price for a single-family house slid by 3.2 per cent. That benchmark, representing a typical house, was $479,599 in December, down from $495,400 during the same month in 2012, the board said Thursday.

The benchmark price has dropped from three years ago when it was $515,500, the board said. And it’s lower than the $483,400 price recorded five years ago.

So here’s the cheat sheet:

Vancouver ‘flat’ = 7-8% drop over four years.

Victoria ‘flat’ = $35,901 drop over three years.

Realtors say condos a great investment

Wednesday, December 18th, 2013

Royal LePage has released a report that forecasts condos values to have a robust future.

Yes, even Vancouver condo values, which have stagnated for years!

Status perceptions, too, have done a 180, according to Chris Simmons, owner/broker, Royal LePage Westside, City Centre and Sunshine Coast. In 1974, buyers kept condo purchases down to a disdainful two to three per cent of the housing market. Today, the idea of houses barely flickers on buyers’ radar. Instead they’re thinking about whether to buy a condo in a bustling or quiet location.

Simmons just placed a professional couple in a $750,000, 1,140-square-foot, two-bedroom-and-den condo near the Olympic Village, “with nice views and well located.”

Hopefully the proud new owners are in a building with heat!

We’re still waiting for the report on the future value of cars from the automobile dealers association, but early rumours have us excited!

Read the full press release news story in the Vancouver Sun.

Ridiculous prices welcome ridiculous comparisons

Monday, December 2nd, 2013

Did you know you could buy nine mansions in France for the price of one boarded up Vancouver tear down?

Of course you might have to live in closer proximity to fresh baked croissants if you choose the French route, but at least one of them comes with 400 acres of land which should give you some buffer if you find that scent offensive.

PriceyPads ran this comparison and includes some beautiful pictures in their post.

Of course this is Vancouver so that’s an ‘asking price’, which may or may not bear some some relation to reality.

Just like craigslist rents, sometimes we get carried away with our asking prices.

You might remember the story of the extremely expensive listing in West Van with pictures of an imaginary house in the listing.

The asking price on that one was just south of $38 million.  That was the asking price.  The selling price was a bit less, well nearly $30 million less actually.

Housing Collapse: banks ok, consumers vulnerable

Wednesday, November 27th, 2013

The head of the OSFI is warning about the dangers of a Canadian housing market correction.

Speaking on Monday Julie Dickson said that the OSFI would be preparing new guidelines for the mortgage industry.

“Consumers must be considered here because, while banks may be able to withstand shocks, consumers may not,” said Julie Dickson, the head of the Office of the Superintendent of Financial Institutions. “Banks have to set aside reserves for unexpected losses and are typically far better situated to deal with shocks than consumers — who may be highly indebted and therefore particularly vulnerable to significant increases in interest rates or unemployment.”

For more details read the full article over at the Financial Post.

October 2013: Vancouver house prices stalled out.

Wednesday, November 6th, 2013

After last years abysmally low number of home sales, some people will be glad to know that sales have climbed.

Unfortunately that hasn’t done anything for prices.

The REBGV has released their october stats package and the composite benchmark price for all properties has actually dropped slightly from where it was a year ago, dipping a tiny half a percentage point.

The Province see this as a big rebound for the most expensive real estate market in Canada.

When mommy and daddy help you buy.

Monday, November 4th, 2013

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.

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