Vancouver Condo Info

No, not the Realtors®.  Thieves have been posing as prospective ‘buyers’ and stealing small valuable items from homes being shown for sale including jewelry and electronics.  There have been a rash of thefts from Langley open houses according to a bulletin sent out to all FVREB Realtors.  I wouldn’t be surprised to hear of similar problems in Vancouver.  If you’re holding an open house you might want to keep an eye on your stuff:

Multiple thefts at Langley open houses and private showings

Langley RCMP are asking members to be on the lookout for suspicious “buyers” targeting showings in the City and Township of Langley and to remind homeowners to secure their valuables.

Between May 2 and 10, thieves stole jewellery (rings, necklaces and watches), designer sunglasses and electronics on counters and in drawers. No suspects have been identified.

Please report any suspicious activity to the Langley RCMP at 604.532.3200.

Hat tip to chilled for the link.

Ok, this should hopefully be the last Olympic Village story for a while, but manx posted a link to more coverage of the uphill climb that the city faces to break even on construction costs and get paid for the land:

Inside city hall, officials are encouraged by the interest in the Olympic condos. But privately they express fears the city won’t recover the $170 million it is owed for the land on which the Olympic village stands.

Taking the land costs out of the equation, there may be the prospect for break-even, or a slight profit, on the construction price tag. But some serious challenges remain for this star-crossed real-estate deal.

The first is the HST, which will be applied to the new condos July 1.

Early buyers will no doubt be spurred on to make a deal before Canada Day, to escape the added HST costs. But the post-HST world could dampen buyer interest.

Vancouver city hall certainly thinks so. Officials have been lobbying the provincial government for an HST holiday, to help the city minimize the $1-billion project’s losses. The province has responded with a flat no.

The other challenge is the time frame of the Olympic sales plan.

It’s anticipated that sales of the remaining 474 condos will be stretched out over two years, to ensure there is no glut that might push down prices. The problem is the rising cost of credit.

Read the full article over at the Vancouver Sun.

Vansanity pointed out this article in the Vancouver Sun.  Canada has the highest level of household debt amongst developed nations and right here in BC we have the highest willingness to go into debt in all of Canada.

“It’s difficult to make a simple judgment [that B.C. is] better off or worse off,” said Elena Simonova, senior research and policy analyst with the association, because provincial figures on household debt are not available.

Across Canada, however, the CGA association was able to observe that by 2009, consumer debt in Canada had more than doubled since 1989 to $1.44 trillion -$41,740 for every single Canadian. By the end of 2009,

Canadians’ debt-to-income ratio reached 144 per cent. And household debt, expressed as a ratio compared with household assets, ranked as highest among 20 countries in the Organization for Economic Cooperation and Development.

We’re number one! We’re number one!

This list of commissions for The Brook in North Vancouver is courtesty of thinktom over at Real Estate Talks:

This is a new building with an open house every Saturday and Sunday.  You can call them to book a viewing appoint at other times OR you could pay a 3rd party salesman $50 – $100k to show you the unit.  Perhaps they’ll even drive you there in the new Porsche.

The CBC is reporting that the Bank of Montreal is suing hundreds of people in Alberta over alleged mortgage fraud that falsely inflated the value of many properties. They’re suing lawyers, mortgage brokers and four of their own employees and claiming a loss of up to 30 million dollars.

Other banks don’t appear to be as aggressive in their approach, even though documents indicate they may have been targeted too. Bank of Montreal investigators found documents that showed one Calgary management company had 150 suspect mortgages from 16 different financial institutions.

Rosen said this alleged fraud illustrates how weak and ineffective the controls are in our banking system.

“To me the most exasperating part of our business is we are not doing what we are supposed to be doing,” he said. “We are kidding ourselves that we have good systems, because we don’t.”

A number of these fraud cases showed up in the US as prices declined, funny how they didn’t seem to show up as prices were rising.  Read the full article over at the CBC.

Painted turtle pointed out this article in the Vancouver Sun: Yes, there’s a housing bubble in Canada – but only in three cities.  You read that correctly.  The Vancouver sun printed an article calling the Vancouver market a bubble.  I hope Beelzebub has some of those left over Olympic mittens.

According to a national study released last year by Pitney Bowes Business Insight, the average household income level in Calgary topped $113,000, while the average in Edmonton exceeded $90,000.

Vancouver was well behind both Alberta cities, at $82,300. That’s about $2,000 higher than Windsor, Ont., which has some of the lowest house prices in Canada. Toronto boasted average household incomes of $101,400.

Let’s look at it another way.

When U.S. house prices got to their most extreme levels during the U.S. housing bubble, the ratio of average household income levels to average local house prices got to 10 times or more in overheated markets like Los Angeles and Phoenix.

In Vancouver, the average detached bungalow now costs roughly 11 times the typical average local household income level, based on the data above.

Read the full article at the Vancouver Sun website.

The Bank of Canada has announced that they are keeping the overnight rate at the record low of .25% for now but sent a strong message that rates will be going up sooner rather than later. Expectations that the Bank will raise rates on June 1st have sent the Loony up even higher, surpassing the US dollar.

The dollar jumped 1.58 cents to $1.0012 (U.S.) as investors bet interest rate increases in Canada will outpace those in the United States, where the Federal Reserve shows no signs of boosting rates any time soon.

With the timeline for a rate hike nearly set in stone, investors and economists are turning their attention to how fast rates will move.

Policy makers will end this year with a lending rate of 1.5 per cent, many economists believe, moving to between 2.5 and 3.5 per cent by the end of next year.

The level that most economists consider “neutral” is 4.5 per cent.

If you’ve got a variable rate mortgage now might be a good time to lock in.  If you’re over-extended now might be a good time to sell.  I suspect “neutral” rates won’t have a neutral effect on Vancouver house prices at this level.

The Average selling price of a home in Vancouver BC has reached a new record high.  When inflation is factored in prices are actually higher than they were in 2008, meaning buyers from two years ago who have no transaction or carrying costs are well on the road to riches.

All sectors of the housing market are up; from single family homes, to townhouses, condos, semi-detached, yurts and drainage ditches.  The average price of a parking spot on leased land in downtown Vancouver has reached a new record shattering high of $87,983,223,431.32 imaginary moon dollars.

Even with the recent run-up this still represents tremendous value as the average spot size is large enough to hold a 1972 VW campervan AND a 10 speed Norco mountain bike.

The beginning of the month saw growing inventory as sales lagged, but emergency sales during the final hour of the month have reduced available sales inventory in the REBGV area to 4 units and a rusted out 50 gallon oil barrel, all of which are located in Whalley.  The remaining inventory is currently being fought over by thousands of wealthy South American investors who are visiting the area in anticipation of a UFC truck and tractor pull, tentatively scheduled for May.

In a surprise move early this morning Bank of Carney Minister Finance Flaherty announced the repeal of all mortgage limits currently in place for CMHC insured mortgages and a new set of guidelines.  “if it feels good, do it.  That’s pretty much our motto.” Flaherty said as he scratched at his beard with fingers caked in bright orange Cheetos dust.

Starting April 17, all applications for CMHC insured mortgages will be automatically approved unless the home buyer has proof of income.  The Government of BC also announced new homeowner grants which will see all homeowners receive a monthly cheque for $8,000 to help compensate for the dramatic difference between rental value and purchasing costs.  Interest rates have been reduced to -.5% effective immediately.

The Conference Board of Canada is claiming that 1 in 5 families in this country struggle to afford the home they live in foregoing healthy food and recreational activities.  That’s at a time of record low interest rates.  With the central bank saying they’ll raise rates soon and major banks raising mortgage rates already, what does the future of house prices look like in this country?

The Canadian housing market in general and the Vancouver housing market in particular has been on a huge run for years, but is our unstoppable housing market on the verge of collapse?

Canada’s unstoppable housing market faces a challenge. To stay unstoppable, it needs mortgage rates to remain low and affordable. But to keep setting new sales records, it also needs more people to land more jobs so they can afford to buy more homes.

The problem is it’s next to impossible for the economy to produce both these happy outcomes. Interest rates usually stay low only if unemployment remains high. Once jobless numbers start falling, mortgage rates typically shoot upward. Hoping for both low interest rates and lots of jobs is like a farmer praying for both dazzling sun and buckets of rain.

Domus pointed out this editorial in the Globe and Mail, Tone down the real estate speeches:

A funny thing happens to people when an economic or financial trend holds in place for a very long time. They begin to assume that “a long time” equals “forever.” You can see this clearly in the U.S. Its home prices hadn’t declined on a national level since the Great Depression, so buyers and rating agencies assumed they could never go down – until they did.

Read the full article here.

On a side note Raincouver points out this morning that RBC and TD have just announced the first mortgage rate increases since October, with the other banks expected to follow.

The biggest jump is attached to the popular five-year fixed closed rate, which moves from 5.25 per cent to 5.85 per cent at both banks. That’s the posted rate, which is routinely discounted by the big banks.

RBC’s new discounted rate for the five-year term also rises 6/10ths of a percentage point to 4.59 per cent. TD’s rises the same amount to 4.55 per cent.

Both banks also raised their three-year and four-year fixed closed rates. The posted three-year rate at Royal Bank climbs one-fifth of a percentage point to 4.35 per cent, while the posted rate at TD jumps 4/10ths of a point to 4.70 per cent.