Jesse pointed out this article bloomberg: Asian Buyers Buoy New Home Demand in California’s Orange County. It turns out we’re not the only place that get’s the hype about suitcases of cash:
“You know why Orange County is doing better?” said Wang, a native of Taiwan who splits her time between Shenzhen in southern China, where she oversees a toy-manufacturing business, and Irvine, California, where she raised her three children. “It’s because all my neighbors are from China and Taiwan, and they all bought their homes in cash.”
And you know what ‘doing better’ means? It means house prices dropping by ‘only’ 39%.
Demand has kept property values from declining as much in Orange County as in other regions. The median home price was $392,000 in January, down 39 percent from the June 2007 peak. That’s less than the 49 percent decline across Southern California and the 51 percent slump nationwide, DataQuick said.
Pretty good news eh?
Over at the The Star, our mayor has helped to write an opinion piece asking that the CMHC provide more loans for rental housing construction:
For most of us, housing is our biggest expense. One out of every five dollars we earn goes to build, buy, rent and run our homes. Facing high home prices, large personal debts, and an uncertain economy, fewer Canadians can buy a new home today than in the past, and they are choosing to rent instead.
Unfortunately, in many cities finding an affordable place to rent is nearly impossible. The most immediate problem is supply. Vacancy rates under 3 per cent push rents up. In Vancouver and the Greater Toronto Area, it’s 1.4 per cent.
Vacancy rates this low force our young people to move out of the city, threaten seniors on fixed incomes, and have a negative impact on local businesses.
That’s why this spring’s federal budget must put Canada’s rental housing market on solid ground, by pursuing low-cost, high-leverage policies that get jobs on the ground and build housing Canadians can afford.
It’s like magic, creating jobs and homes. What could go wrong with a ‘low-cost, high-leverage’ policy like that?
The Vancouver real estate bubble is getting attention from outside Canada again. This time Mish is in Business Insider comparing current prices in massively overpriced Vancouver to what the same price gets you in post-bubble Ireland. The difference is rather large.
There are some pretty nice houses you can get in Vancouver for only $890k! Two of them are even potentially liveable and one has even had some upgrades.
The post-celtic-tiger property is pretty decent as well, and a fair sized discount from the original asking price of $6 million.
Now clearly what happened in countries like Ireland was that people who should not have been were extended credit. Lots of credit. And since property prices were rising they were viewed as ‘can’t lose’, until they lost.
Have we made credit too easy in Canada, or are we more sensible than that?
UPDATE: reader Anonymouse pointed out that Mish comparing a hotel to a single family home is not a fair comparison. In response Many Franks posted this link about home prices in Donegal from last September:
The average price of a new home in Donegal is estimated at €179,000, representing a drop of 43pc from peak values. New three- and four-bedroom semi-detached houses are cheaper than in most other parts of the country, with averages estimated at €128,800 and €155,000 respectively.
Second-hand homes are estimated to average €165,800, down 3pc from last April and a drop of 41pc from peak values. The cheapest second-hand apartments in the country can be found in Donegal, with the average price of a one-bedroom apartment estimated at €50,000, and €57,500 for a two-bedroom apartment.
This comment was left by Condo Paradise in the previous thread:
This rambling is addressed to all those who contributed to the insane property values we have here.
First, I would like to disclose some relevant info.
I own my 1000 sq, ft condo(no intention to sell) which I purchased new back in 1996 for $279,000. I don’t care what it is worth today because I enjoy living here. The building is situated in a very quiet neighborhood and consists of 120 suites. We have had very little problems with the structure as we are diligent with our maintenance and repair. Our strata fees are $300 – $400 /month and have a healthy contingency fund Over the years the demographics of the building has changed dramatically. We have 25% of the suites vacant.
This is where I begin.
Continue reading Condo owner against speculation
A 19 storey high rise tower at Broadway and Kingsway: smart planning for dense living or harbinger of gentrifying doom?
Perhaps there is a point when you say “no thanks, that’s just the right amount of tall buildings, we want no more.”
But is this really the time for that?
I had a friend in town from the States and driving through the neighbourhood his first impression was “Huh, you’d think the corner of Broadway and Main street would be more impressive”.
Ours is certainly not the broadway of New York, it’s not even the Broadway of Portland.
Our Broadway is a bus route scattered with greasy spoons and mini-malls. Are we really going to stop development at this point?
The argument against this proposed project is that it will ruin the flavour of the neighbourhood, but can’t a real city generate a creative class that evolves with the times? Are we so fragile that a new condo tower can destroy a neighbourhoods character?
Vancouver has a problem and it goes beyond housing costs. It seems very much to me like a city in it’s awkward teenage phase. It’s a pretty teenager, but so freaked out about what everyone thinks it’s afraid to take chances or be itself. It’s afraid of change and apparently can’t handle it’s alcohol.
If we really want to be a world class city it’s time for us to grow up.
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