Vancouver Condo Info » opinion

Racist marketing and fact-free media

RTYT — Tue, 24 Jan 2012 08:34:17 +0000

Look at this garbage. It’s an article submitted by “The BC Real Estate Convention” and printed as if it’s actually news in the Vancouver Sun. First off, the writing is atrocious. Don’t they even have an editor read these advertorials before they’re printed? Second, there are lots of statements presented as fact that have absolutely nothing to back them up:

Experts claim that the Chinese Mainland buyers and investors will continue to seek for overseas investment opportunities, in Vancouver.

Which ‘experts’ are these? Oh never mind, we’ll just take your word for it then.

As it is more cost efficient to purchase a property rather than renting, and considering the long term returns of the investment, purchasing properties in Vancouver become high on demand.

Yeah, somebody is ‘high on demand’ if they really believe that current prices in Vancouver make buying ‘more cost efficient’ than renting. There are many many markets around the world where buying is ‘more cost efficient’ than renting, Vancouver ain’t one of them.

However, as much as Feng shui is a well respected practice by many Chinese immigrants and potential home buyers and investors, there are always those “intelligent” ones that seek to obtain the optimal economic value from their investment in Vancouver’s real estate.

Wow. I don’t even know how to respond to that.

If you go to the The BC Real Estate Convention web site you’ll see that this trade show is sponsored by The Vancouver Sun and Province.

Then there’s this piece over at 24 hours:

Metro Vancouver will receive an influx of businessmen from mainland Chinese this week, intent on spending their two-week Lunar New Year holiday with family, as well as scooping up significant amounts of real estate.

Julia Rowell, sales manager at downtown Vancouver’s Maddox development, said this phenomenon has been going on for over 25 years, but 2012 looks to be especially busy.

Yeah? I think TPFKAA says it best:

HAHAHAHAHA! That’s absolutely hilarious!!

So in 1987, (a full five years before Deng Xiaoping’s reforms that enabled creation of individual fortunes) HAM from mainland China was increasing sales just after CNY.

/facepalm.

The hype seems to be working on the listings side. This year started off with the second highest number of listings in the last ten years and has grown at a faster rate than any of those years, especially on the west side:

I’m sure those sellers are hoping this hype pays off, and maybe it will, but then again maybe our market isn’t driven solely by wealthy offshore buyers. Most local first time buyers aren’t in the market for multimillion dollar homes anyways, so how would this even affect them?

Blaming ‘Chinese buyers’ for out of control prices is simplistic and racist. This city is nearly half asian so of course ‘Chinese buyers’ have an impact, but what about easy credit, low rates, CMHC pumping and local speculators?

Just for comparison, the city of Monterey Park in California has the highest percentage population of Chinese Americans of any US municipality. Here’s what home values there look like over the last few years:

This post was submitted by RTYT.

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Carney cries wolf again.. will it come?

wreckonomics — Mon, 23 Jan 2012 08:45:44 +0000

Mark Carney is making new remarks about some Canadian real estate markets being “probably overvalued“.

It was the second time in recent days that Bank of Canada Governor Mark Carney voiced concern about property prices, which surged after the financial crisis as borrowing costs tumbled.
“We see that in a number of real estate markets in Canada, valuations are at a minimum, firm; in others, they’re probably overvalued. So there are risks there. We’re watching it closely. We’re working with our partners, the federal government, the superintendent of financial institutions,” he said in an interview on “Question Period” on CTV.

“Measures have been taken. They’ve been effective. We’ll keep up that vigilance. If more needs to be done, I’m sure the appropriate authorities will take those measures.”
The federal government has tightened mortgage regulations several times in a bid to prevent a property bubble from forming. Finance Minister Jim Flaherty said on January 17 that the government is watching the housing market closely and is ready to intervene if needed, but is not about to do so now.

Yes, the federal government has tightened mortgage regulations “several times”.. Here’s a timeline of those changes courtesy of Burbs Boy:

Jan 2006 – Minority Conservative Government elected
Feb 2006 – 25 year increase to 30 year on test basis
Jul 2006 – 30 year test affirmed and also increased to 35 year
Jul 2007 – 35 year increase to 40 year
Oct 2008 – 40 year decrease to 35 year
Mar 2010 – 35 year decrease to current 30 year

This post was submitted by wreckonomics.

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Limits to foreign ownership

Spork — Wed, 18 Jan 2012 08:03:04 +0000

Someone over at the Vancouver Courier is of the opinion that foreign buyers have driven up the cost of real estate in Vancouver.

Of course, capitalism requires competition, and free market principles should drive our housing market. But we no longer control that market. And despite growing evidence of market dysfunction, Premier Christy Clark, who could stiffen provincial regulation, and Mayor Gregor Robertson, who could increase taxes on foreign property owners, cede our land to foreign buyers.

Not so in Australia.

In recent years, Australian cities have experienced Vancouver-style real estate booms, with housing prices soaring from Sydney to Melbourne. Like here, buyers from China help drive Australia’s speculative real estate market. Faced with mounting public pressure, in 2010 the Kevin Rudd government introduced strict regulation aimed at foreign ownership. Under the new rules, the Foreign Investment Review Board (FIRB) screens foreigners (including temporary residents and students) to determine their land purchase eligibility. Foreigners can’t buy existing properties and must build on vacant land within two years of purchase or face government-ordered sale. Scofflaws face capital gains confiscation. Finally, before foreign homeowners leave Australia, they must sell. No more overseas landlords Down Under.

Full article here. Is it time for BC to start looking at regulating home ownership and foreign buying?

This post was submitted by Spork.

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Feeling bearish on Canadian housing?

Karl Marx Carney — Thu, 05 Jan 2012 08:18:52 +0000

Over at the Financial Post there’s an editorial that’s pessimistic about the Canadian real estate market:

The arithmetic is simple, and some of the warning signals look uncomfortably like those of the days before the market implosion that brought the 1980s to a thumping, crashing close.

Start with resale home prices. A “matched sales” approach to measuring prices tracks, over time, multiple sales of the same properties — this reduces the likelihood of measurements getting skewed by cyclical or regional shifts in the price mixes of homes that happen to be selling. Over the past ten years, prices so measured, in Canada’s major markets, have doubled, increasing at more than 7% per year, at a time when consumer price inflation generally had been running at about 2%.

So why is that a problem? Because average wages have not been running much ahead of inflation, and that means that house prices have steadily been bubbling out of reach of workers’ abilities to afford them. The house price-to-income ratio last peaked and then plummeted from 1989 to 1991, and the ratio regained its prior peak in 2004-05. Since then? It has climbed steadily higher yet, the ratio now far outstripping anything seen in the past 20 years.

Eventually that makes housing affordability a problem, and quickly so when interest rates start to rise. Housing looks affordable now, given that mortgages remain on the market at rates near their all-time lows. However, carrying costs relative to income would rocket upward, were rates one or two percentage points higher. Such rate increases are not in the cards in Canada today — but they will arrive all the same, and sooner rather than later if inflation continues to test the upper bound of its target range, as it did through 2011.

Read the full article here.

This post was submitted by Karl Marx Carney.

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Forecasts for 2012 housing market.

Karl Marx Carney — Thu, 29 Dec 2011 08:12:17 +0000

A very sensible forecast from Tsur Sommerville:

“We start off by saying I have no idea,” Somerville told the Georgia Straight in a phone interview. For him, forecasting is a risky business because “you’re wrong more often, even if you’re intelligent”.

An economist who earned his PhD from Harvard University, Somerville said that he prefers to evaluate what others have projected for the new year.

“The general trend seems to be that it’s going to be a slower market than 2011, and I think the combination of lingering economic unease and uncertainty is consistent with that,” the UBC academic explained. “The other thing is 2011—if you take away Richmond, the West Side [of Vancouver], and West Vancouver—was not some amazing prices-going-through-the-ceiling kind of year. In general for most places, things are going to look like 2011. Maybe a little bit slower.”

Asked about the biggest risk to the market, Somerville responded: “The economy, the economy, and the economy.”

Full article in the Georgia Straight.

This post was submitted by Karl Marx Carney.

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Don’t take debt into retirement

Scott — Thu, 22 Dec 2011 08:25:19 +0000

Here’s David Chilton on using home equity as a substitute for retirement savings:

There are too many risks associated with real estate — even in pricey markets like Vancouver — to justify making it the sole element of a retirement plan, the author and personal finance expert says.

“I don’t like it as a strategy at all because what happens is that anytime you have that kind of exponential rise in real estate it almost always ends up going the other way,” says Chilton. His latest book, The Wealthy Barber Returns, was released in September.

“It may not happen here because there’s so much foreign money coming in. But the potential for a significant pullback is still there.”

House price increases even in super-heated markets are likely to become more muted as the tailwind generated by rock-bottom interest rates eases, he says.

Did I just enter Bizzaro World? Aren’t ‘super heated’ markets often at a greater risk of a pullback?

This post was submitted by Scott.

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Young Americans don’t care for home ownership

Kingston — Wed, 21 Dec 2011 08:49:21 +0000

Do echo boomers have different attitudes towards home ownership than generations that came before them?

The lack of assets isn’t the only encumbrance to housing: Echo Boomers value education, people and leisure more than other American generations. Of the Echo Boomers I spoke with, 13% were homeowners, yet less than a third reported interest in owning a home someday (with female Echo Boomers wanting homes more than male Echo Boomers). They preferred graduate degrees, living in social areas (not suburbs) and freedom instead of homeownership. A few of these Echo Boomers will need a decade to pay off their student loans after which another large loan, like a mortgage, might lack appeal.

From Forbes.

This post was submitted by Kingston.

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TD: mortgage rules should be stricter

Eddie — Thu, 15 Dec 2011 08:22:15 +0000

The CEO of TD bank has said in an interview that he thinks the government should make mortgage rules stricter.

Mr. Clark believes cutting the maximum length on federally insured mortgages to 25 years, from 30 years, would be a good step to slow rising household debt, which hit a new record this week, surpassing that of the United States and Britain.

“If you thought the Canadian economy was strong enough to take another adjustment, then we would say take the 30 [year amortization limit] down to 25 and get this back to where it originally was,” Mr. Clark told The Globe and Mail.

“It’s hard to know whether the economy can take another crank like that,” he said, referring to Ottawa’s last round of changes. “But my own gut would tell me that it may turn out that we do have the absorption capacity.”

Now why would a bank that spends tonnes of money on advertising mortgages and essentially makes risk-free income on insured mortgages want the government to tighten up the rules? Could they be seeing consumer debt levels starting to pose a risk to uninsured loans?

This post was submitted by Eddie.

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Water problems in New West condo

Kingston — Mon, 12 Dec 2011 17:47:10 +0000

Chilled wrote the following in this weekends thread:

Condo Boom?

I live in a high end New West condo that is approximately 3yrs old. They have recently had another major ‘flood.’ Fortunately I live on a floor well above the high water mark and my unit hasn’t suffered damage. Damages has been extensive. Being a renter I am not privy to the strata minutes, but I have had discussions with strata members and believe my information to be accurate.

“Defective expansion joints” are blowing out, causing main water lines to let go. Yikes!!! The strata has posted notices that “faulty expansion joints” are going to all be replaced.

Faulty? Yeah sure, probably installed by a “plumbers apprentice” without enough experience supervised by a journeyman who is hardly competent himself. As a tradesman myself, expansion joints just don’t ‘fail.’ Especially at an alarming rate and if they did, wouldn’t this be going on everywhere the product was installed leading to a subsequent recall?

Anyway, get this;

-the developer is the property management company
-the engineering company works for the developer
-the mechanical contractor works for the developer

Strata members tell me it is “warranty” but when I query them on who pays for the cleanup and restoration costs I’m told they are “not sure yet.” Basically, this will cost the strata hugh one way or the other.

Hey, any of the strata members reading this will recognize the building so read this carefully;

-call in a mechanical consulting engineer specializing in piping. You will have to bring someone in from out of province, maybe Alberta. The old boys club in Vancouver will prevent independent and impartial analysis
-FIRE the development company acting as the strata property management company. Do you see a conflict here as the building inches through the warranty period?
-take the engineering report to a legal firm willing to take the developer to task on this
-pursue the same avenue with all the other problems in the building. It is not normal to have the elevator service company on site as much as the mail man.

Finally, please stop telling us renters in the elevator “I wish I rent like you” as I know you drank the koolaid and made stupid decisions that will cost you for the rest of your lives.

But if you do happen to see the owner of my unit at an emergency strata meeting, please thank him for what is a huge rental subsidy.

Sign me,

Happily above the high tide mark.

This post was submitted by Kingston.

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The move-up buyer is screwed.

John — Wed, 23 Nov 2011 08:10:57 +0000

If you recently bought a condo in Vancouver this probably isn’t what you want to hear, but let’s just think about this situation realistically. Let’s pretend we get the ‘perfect’ scenario of constantly rising house prices. A young couple buys a condo to get on the property ladder and plans on starting a family and moving up to a larger home in a few years. When it’s time to sell, it’s a jackpot! Their condo has increased by $100 grand and they magically find a buyer at that price right away..

but wait. That home they wanted to buy is up $200 grand. Better hope their income has been increasing a lot faster than everyone else.

And that’s in the magic ‘balanced’ scenario where homes and condos increase at roughly the same percentage year over year. For a while here in Vancouver, house prices have lept up while condos have been mostly flat. The hypothetical move-up buyer is even more screwed.

Maybe it’s time to get some smaller furniture and turn the ‘den’ into a babies room, since we don’t seem to build many large family size apartments in Vancouver. It’s either houses or ‘junior’ one bedrooms with little in between.

Constantly increasing house prices means you only win if you sell and get out of town or sell and rent. The move-up buyer is screwed.

This post was submitted by John.

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Love that Canada housing bubble..

The Pope — Tue, 22 Nov 2011 16:38:28 +0000

Interesting article over at the National Post on the ‘different here‘ argument.

If the Canadian housing market were to collapse, Canadian taxpayers would be hit hard. The federal government is fully liable for any losses incurred by the CMHC, which currently backs somewhere in the order of $600-billion worth of mortgages. It has been bailed-out by the government twice in the past.

The government needs to act quickly to remove the factors that are causing the market to expand so rapidly, as well as to disperse the risk across the financial system. The CMHC should be privatized, much like the Australians successfully did in 1997. Banks and insurance companies should be allowed to do what they do best — assess risk, without standards being forced upon them by government bureaucrats. Doing so would not only spread the risk throughout the financial system and protect taxpayers, it would also reduce the likelihood of Canada experiencing a U.S.-style housing crisis.

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Candidates on Vancouver house prices

Drippytown — Thu, 17 Nov 2011 09:01:13 +0000

One candidate in the upcoming election is focusing on the issue of house prices in Vancouver. Independent Sandy Garossino thinks that Foreign buyers are driving up Vancouver property prices and pushing out young families.

Garossino said that if the average median income in Metro Vancouver is $67,500 and the average price of a house in Vancouver stays at around $800,000, then it’s locals who will be forced out.

Garossino said she knows placing ownership restrictions is not an easy solution and that there are complex and sensitive issues involved. Still, she said, local affordability needs to be addressed.

“This is such a concern to me. Where are families going to raise their children?”

Garossino says other cities facing similar problems have have workable solutions.

“Singapore has zoning requirements that allow certain areas to be freely available to the international investor and other areas are only available to domestic buyers.”

Two Mayoral candidates seem to have noticed that this issue is getting attention and added their own thoughts. Gregor Robertson sort of thinks it might be an issue, but see’s the next couple of years as the time to look at the problem and figure out what to do about it.

Gregor Robertson told CBC News Sunday that the city needs to understand the role foreign ownership is playing before taking any steps to change it.

“I see these next couple years as assessing what the problem is, how significant it is, and what best tools are that might address it,” Robertson said.

Suzanne Anton believes that people shouldn’t have to leave Vancouver to buy a home, but doesn’t think foreign buyers are the problem. ~~Dave~~ Anton says the solution is to cut development costs so that builders can pass on the savings to buyers.

“Market-based solutions to housing supply are the only effective means of creating real affordability,” Anton said.

“Everything else is a gimmick.”

This post was submitted by Drippytown.

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Vote

The Pope — Mon, 07 Nov 2011 16:35:53 +0000

If you live in and around Vancouver you probably know its election time. Voting day is on the 19th.

This is an open topic political thread. Who do you feel is best suited to lead this city and why?

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Ambitious people leaving Vancouver

Jackson — Wed, 02 Nov 2011 04:02:17 +0000

The economy in this city is broken. I can no longer count on two hands the number of friends and coworkers who have left to find better opportunity elsewhere in the last few years. As Vancouver Magazine points out, it’s what young ambitious people are doing right now. Vancouver is squeezing the middle class out.

Around January 2002, the average price of a detached house in Metro Vancouver was $390,000. That has since nearly tripled to $1.1 million. For those who couldn’t or didn’t buy in—who were outbid, came late to the party, or sat it out waiting for a massive market correction—real estate has been a dismal science. This July, the MLS listed only 24 two-bedroom condos for sale under $300,000. That’s the maximum mortgage available to a household earning the median family income; Vancouver proper has about 30,000 renter households in that category. The story of real-estate affordability here can be told in that one stat: in a city of over 600,000 people, two dozen bottom-of-the-barrel starter condos available for sale to the middle class.

This post was submitted by Jackson.

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Hello Inflation.

wreckonomics — Mon, 24 Oct 2011 07:01:54 +0000

Inflation is surging ahead, but as long as we can keep the global economy nice and F***ed up, interest rates should stay at record lows. Free money!

Core inflation, which excludes volatile elements such as gas and food, surprised economists by jumping to 2.2 per cent in September annualized from 1.9 per cent in August. Headline inflation also surged higher, to 3.2 per cent annualized, as clothing, tuition fees, car prices and transportation costs all contributed to higher prices for consumers.

Economists had expected an overall annual rate of 3.1 per cent in September and a core rate of two per cent.

Jimmy Jean, economic strategist with Desjardins Capital Markets, called the CPI “pop” a short-term issue as tuition is a one-off event, clothing prices are seasonal, and auto prices are playing catch-up.

“From the Bank of Canada’s perspective, we don’t believe this to be much of a worry as it is not indicative of broad-based accelerating price pressures,” he said in a note.

Mark Carney, governor of the central bank, is universally expected to maintain the benchmark lending rate at one per cent, with many economists now projecting a resumption in policy tightening no earlier than the second half of 2012 as external headwinds are still the most pressing issue for the Canadian economy.

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Boomers should consider ‘for sale’ signs

wreckonomics — Tue, 18 Oct 2011 07:23:26 +0000

Interesting bit over at the Globe and Mail: Nearly a third of our population is boomers who will be nearing retirement soon. Should they be cashing in on the housing boom and sell early to fund retirement?

This could be one of the most important questions that baby boomers deal with as they enter retirement, and the financial impact will be widely felt. Expect a slowing in today’s hyperactive housing market, but not right away.

“There’s this idea that when the kids leave home, boomers will downsize,” said demographer David Foot, author of the influential book Boom, Bust & Echo and professor emeritus of economics at the University of Toronto. “Well, that doesn’t happen. You hold on to the family house, probably into your 70s because you want grandkids to come and visit.”

So figure on having about 10 years before a downsizing bulge alters the balance of sellers and buyers in our housing market. Should retiring baby boomers wait that long? Mr. Foot’s analysis certainly doesn’t suggest a bright future for house prices.

Read the full article here.

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Bull or Bear – put your money where your mouth is.

ulsterman — Mon, 17 Oct 2011 09:50:54 +0000

There’s always a lot of talk about shorting the market on this blog. Well in the UK you really can short the housing market. IG Index, the financial spread betting outfit allows punters to speculate on many different markets, one of which is UK house prices. If this were offered in Vancouver, how many bears would put their money where their mouths are, so to speak?

http://www.igindex.co.uk/spread-betting/house-prices-example.html

This post was submitted by ulsterman.

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IMF thinks you have too much debt

wreckonomics — Thu, 06 Oct 2011 08:12:05 +0000

Those old fogeys at the International Monetary Fund are raising their eyebrows at consumer debt in Canada again.

“Developments on the housing front require increased vigilance, and consideration may need to be given to additional prudential measures to prevent a further buildup in household debt,” the Washington-based IMF says in its latest economic outlook for the Western Hemisphere.

Clearly they don’t understand that it’s different here. Tell ‘em Mr. Flaherty.

For his part, Mr. Flaherty says he’s satisfied he’s done enough to curb the accumulation of mortgage debt.

The finance minister said in New York on Wednesday that he would need to see “clear evidence of a bubble in the housing market in Canada, which we have not seen,” according to a report by Bloomberg News. Mr. Flaherty defined a bubble as “dramatic surges in prices in some part of the country.” He also said the measures he took in January have led to “some softening in the Canadian housing market.”

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Maintenance and safety standards for rentals

ttul — Tue, 27 Sep 2011 14:45:51 +0000

Like many VCI readers, I have been shorting the Vancouver property market by renting. And, like many renters, I have had to contend occasionally with landlords who take an all-to-casual approach to property maintenance. In this post, I’m going to describe a new legal method I have discovered which combines the Residential Tenancy Act and a Vancouver By-law to force landlords to fix certain maintenance and building quality standards that you may not have thought were “mandatory”. This includes things like ensuring there are enough electrical outlets in each room of a suite, or that the floors be properly levelled.

It all starts with the Residential Tenancy Act (RTA), which says in section 32 that

A landlord must provide and maintain residential property in a state of decoration and repair that (a) complies with the health, safety and housing standards required by law…

This is a very powerful statement, because it forces landlords to ensure that their properties conform to every building code, electrical code, maintenance code, etc.. in effect within the jurisdiction where the property is located. In the case of Vancouver tenants, this refers to any and all building maintenance by-laws, fire safety by-laws, electrical by-laws, etc.. as well as province-wide rules and regulations concerning buildings.

The City of Vancouver has an omnibus By-law simply titled, “Standards of Maintenance” (https://vancouver.ca/bylaws/5462c.PDF), which is “A By-law for prescribing standards for the
maintenance and occupancy of building sites within the City of Vancouver to ensure that such buildings and sites are free from hazard and are maintained continuously in conformity with accepted health, fire and building requirements.” This bylaw applies to, “all land and all buildings in the City, and, unless otherwise specified, the owner of said land and/or buildings shall be responsible for carrying out the work or having the work carried out in accordance with the requirements of this By-law.”

With that out of the way, let’s see how the RTA can be combined with By-law 5642 to force your landlord to fix certain things that you may never have thought needed to be fixed:

– Electrical Safety (see 5642 section 19)

+ Yes: Plenty of electrical outlets! “Every habitable room in a dwelling shall have at least one electrical duplex outlet for each 120 square feet (11.2m5) of the floor space; for each additional 100 square feet (9.3 m5) of floor space a second duplex outlet shall be provided. Every kitchen shall have at least two electrical duplex outlets which shall be on separate circuits.”

+ Lots of light! “Adequate levels of artificial lighting shall be maintained in good working order at all times as in Table 19A” — this includes specific lumens of light output in each type of room.

– Landlord storing his old junk in the back yard? Section 4 says, “All land shall be kept clean and free from rubbish or debris”

– Walkway old and cracked? Section 4 says, “Suitably surfaced walks shall be available on all land leading from the main entrance of each building to the street or driveway”

– Bed bug infestation? “If pests have infested land, or any building or accessory building on it, the owner of the land must eliminate the infestation”

– Breezy doors or windows? “Exterior doors, windows, skylights, and hatchways shall be maintained in good repair and weathertight.”

– Crappy floors? “Floors shall be maintained in a clean and sanitary condition, reasonably smooth and level and free of loose, warped or decayed boards, depressions, protrusions, deterioration or other defects which are health, fire or accident hazards.”

– Crappy walls or ceilings? “Interior walls and ceilings shall be maintained in good repair and free from holes, or loose or broken plaster that may create health, fire or accident hazards.”

The laws are there to protect us all. Don’t let your landlord convince you that he doesn’t have to fix the flaking plaster in your character living room just because “it’s an old house”. Show him the law, and get some fixing going on!

This post was submitted by ttul.

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Alternatives to Vancouver?

Curious — Wed, 21 Sep 2011 07:46:20 +0000

I’m finding myself less interested in living in Vancouver and I’m curious about the options – are any of you reading this site from outside Vancouver? I’d be interested in opinions, both pro and con of other cities and towns.

I’ve lived in Vancouver for my whole life. I’m in my early 30s and have a young family. I have a reasonable income that is portable. I currently rent in Point Grey, I like the proximity to shops and beaches here but would love to find a place that was brighter in the winter, even if it’s a bit colder. I’m just not a big fan of the rainshadow and I don’t care about the mountains that bring the rainshadow so proximity to mountains is unimportant.

I would also love to find somewhere that has less of a junky/ homeless problem. Even here on the westside it seems like the homeless population has doubled in the last couple of years.

Any ideas of good places for a young family to live?

This post was submitted by Curious.

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Heading into a recession with record debt

Jacko — Wed, 14 Sep 2011 07:28:54 +0000

Troll posted a link to this article: Canadians are getting carried away with debt in the current low interest rate environment and may be particularly unprepared for a recession.

At the Toronto edition of the MoneyShow last week, TD deputy chief economist Derek Burleton warned we are in a “balance-sheet recession that will take years to shake off.” As a result, Burleton said, interest rates will stay “very low for a long time.”

At the same show, Danielle Park, of Barrie, Ont.-based Venable Park Investment Counsel Inc., told attendees to “keep your powder dry, pay off debt and use these record low interest rates to get debt free and downsize real estate sooner than later, where necessary: Canada has gone on longer than it ought to have in this cycle.”

So are you taking advantage of record low interest rates and loading up on debt or are you ‘keeping the powder dry’ in the assumption that we’re heading into another recession? As a nation we keep loading up on more debt.

This post was submitted by Jacko.

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Interest Rates Are Too High!

wreckonomics — Tue, 13 Sep 2011 07:09:37 +0000

Now this is interesting.. More than one third of Canadians between the ages of 30 and 39 think that current interest rates are about average or high.

Seriously.

There are a whole bunch of people out there that think these record low interest rates are normal or better yet, think that they are high.

I think perhaps it’s not the rates that are high.

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Advertorial in the Vancouver Sun

Karl Marx Carney — Tue, 30 Aug 2011 08:56:49 +0000

In an editorial the Vancouver Sun says the best way to afford a house in Greater Vancouver is to buy a house far outside of Greater Vancouver:

That being said, RBC’s average price of a standard two-storey house of $843,300 may understate the case because there is virtually nothing detached on the west side for under $1 million and it’s slim pickings on the east side as well. Indeed, the Real Estate Board of Greater Vancouver says its benchmark price for all single detached homes in Metro Vancouver is $902,000. However, anyone prepared to commute can buy a lot of house nearby at prices far below those in the city. Detached homes can be had for just over $500,000 in Squamish, less than hour’s drive from downtown Vancouver; and $360,000 in Mission, at the end of the West Coast Express line. There are also bargains – relatively speaking – in Tsawwassen, Coquitlam, Langley and Surrey and other Lower Mainland communities.

How much are they being paid to publish this crap? Here’s the full Advertorial.

This post was submitted by Karl Marx Carney.

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Vancouver drug economy and house prices

Spork — Mon, 29 Aug 2011 08:01:43 +0000

How much does the drug economy in Vancouver drive up prices? I was sceptical about it’s impact until I read this recent article in Vancouver Magazine:

Cam Hui was stunned when he moved back to his hometown after a stint on the East coast. “This city is not overrun with the super-rich,” he says. “But you can’t get into the Vancouver West Side for less than $1.5 million for something that’s not falling down.” In Stamford, Connecticut, where Hui, an investment counsellor, lived previously, prices were just as high. But there it was understandable. The place was infested with people working in the investment business. Stamford has the head office of GE Capital, and, with Swiss bank UBS, the world’s largest trading floor.

Hui doesn’t see that level of financial activity here; nor does he buy the standard explanation for Vancouver’s real-estate prices: that offshore investment or Asian money is largely responsible. In a private blog, he argues that there has to be a connection to the drug industry. “And just putting my economist’s hat on, if it winds up back in the local economy, it creates inflation.” He, by the way, has not bought here because Vancouver’s market is so crazy. He rents instead.

Read the full article here.

This post was submitted by Spork.

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Has inventory peaked?

The Pope — Thu, 11 Aug 2011 16:20:36 +0000

As of yesterday inventory was a few hundred over 16,000. Will we see 17,000 places for sale again this year or has inventory peaked?

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