Category Archives: prices

Ask David Eby anything at noon today

David Eby is definitely one of the most vocal politicians in Vancouver when it comes to issues around housing.

Have you ever wanted to ask him a question?

Now’s your chance. Eby will be hosting an ‘ask me anything’ thread on reddit today at noon (June 22nd)

His first comment on that thread:

I’m looking forward to it. A bit nervous, I’m expecting challenging questions on this important issue. I’ll do my best to answer, or to find the answers for you. I’m also interested to hear suggestions for policy opportunities and what you think needs to be done to respond to the housing crisis. See you then!

Let us know in the comments below if you spot anything note-worthy.

David Eby AMA June 22nd 12pm on Reddit.

 

Canadian Banks could absorb losses in US-style housing crash

Good news for your monday morning!

If Canada saw a ‘US-style housing crisis‘ the big 6 banks could generate enough capital in a few quarters to cover losses.

If Canada were to experience a U.S.-style housing crisis, with house prices falling by up to 35 per cent, mortgage lenders including the country’s big six banks could lose nearly $12 billion, according to a new report from Moody’s Investors Service.

CMHC would also take a hit of about $6 billion if they challenge and reject claims, but if they decided not to they would take about half the loss as it would be more evenly split between the banks and CMHC.

You probably don’t have to worry about a US-style nationwide housing crash, because we have a different mortgage market that is explicitly backed by the government. The main concern would be rate increases and job losses as Canadian debt loads continue to increase:

There was almost $1.6 trillion in mortgage debt outstanding at the end of March, including home equity lines of credit, more than double the amount outstanding 10 years ago.

Read the full article over at the Financial Post.

Pity the detached home-owner

There’s a lot of angry young people in Vancouver, people who think they deserve to be able to afford a home in this specific city.  A few of the angrier ones would like to make the issue all about race, but I guess if you’re of a certain kind of mindset EVERYTHING can be about race.

It wasn’t always like this.  Vancouver used to be a nice small town where the average income would be able to to stretch and afford a local detached home.  Wouldn’t it be great to have gotten in at that time?

Maybe not.  After all, It’s not these owners fault that property prices have gone up and up and property taxes have nudged up a bit as well.

Fortunately if you’re in this group the mayor of North Vancouver has got your back.

Mr. Mussatto said this week that he would like the province to look into separating single-family houses from condominiums and multiple-unit dwellings so owners of single-family houses could be charged a lower tax rate.

The mayor argues that while the value of single-family houses has skyrocketed in recent years, the value of condos has remained relatively stable. “If you’re a condo owner, your taxes may indeed be going down this year, because condos didn’t go up much or they didn’t go up at all compared to single-family homes,” he told me in an interview. “The bottom line is that there are some people who are getting hurt pretty significantly and I want to make sure that we’re fair with the tax system so everybody pays their fair share.”

Read the full article over at the Globe and Mail, and then if you’re so inclined go back to your racist rantings. That’s sure to be an effective way to change the way things are and get everybody on your side.

Ten thousand empty homes

Bubble tea pointed out that back in March a study claimed that 10,800 homes were empty for more than a year in 2014.

They reached this conclusion by studying electricity usage, if it remained flat for 25 days the home was deemed to be vacant.

Of course many of these homes could have been occupied by paleo-humans who eschew electricity in favor of a simpler lifestyle.  How many condos in Kerrisdale are filled with families huddled under blanket, burning their own waste to keep warm?

The majority of the empty homes in 2014 were apartments — 9,747 — and vacancy rates were highest on the West Side of the city, with 9.4 per cent in the area that stretches from Kitsilano to Point Grey and 8.6 per cent in neighbourhoods that include Kerrisdale, Dunbar and Southlands.

Suggested reasons for the vacancies included a home was bought for investment, was under renovation, the owners were on vacation, the home was caught up in an estate sell-off, or it was being flipped. A home was deemed empty in a given month if the hydro data showed a flat consistent use of electricity for 25 or more days in that month for a year. The findings were not specific to neighbourhoods but separated into five large geographic areas. Basement suites were not included in the study.

Are 10,800 empty homes a negative thing for a city, and If you had unlimited power what would you do to change this situation?  Would you opt for incentives for owners to rent out empty homes or a some sort of system to try to prevent them from remaining empty?

Gentleman says “It’s not if, but when bubble bursts.”

CCEC Credit Union is a vancouver-based lender.

Their CEO has the delightful name of “Ross Gentleman” and is interviewed over at BNN where he says that the Vancouver housing market is in a bubble and it’s not if, but when it bursts:

He says they are seeing a number of people ‘trolling’ lenders looking for financing on speculative purchases.

He calls the upper end of the market potentially more volatile and says that CCEC is committed to more conservative lending and tends to focus mainly on primary residences.

Mayor warns property prices put Vancouver economy at risk

The mayor has released a statement reiterating his support for a house-flipping tax saying that without some sort of action the Vancouver economy is at risk:

Gregor Robertson says recent reports and recommendations from banks, organizations, real estate boards and economists has made it clear to him that it’s time to deal with Vancouver’s sky-rocketing real estate prices or the city’s economy could suffer.

On Sunday he released a statement amplifying his support for a house flipping tax as a measure to reduce speculation and a luxury sales tax to help, “rein in the excesses of Vancouver’s housing market.”

“First and foremost, housing needs to be for homes, not just treated as a commodity,” said the statement.

Read the full article over at the CBC.

Mayor explains why Vancouver is so expensive

Lots of young people like to complain about high housing costs here, but do you know why Vancouver is so expensive?

The Mayor explains:

“…Our cultural scene punches above its weight and routinely draws international attention to our theatre, music, comedy, and visual arts. In its first year, we had Canada’s largest public New Year’s Eve celebration. Hundreds of thousands of people year over year come out to watch one of the largest Pride parades in North America.

Patios stay open later, our craft breweries are exploding in popularity, and our food trucks are globally revered. Car-Free Day on Commercial Drive and Khatsahlano Fest on West 4th pack thousands of families on our streets every summer. The PuSh Festival, viff and the Folk Fest get capacity crowds and have lineups onto the street.”

We are pretty much just like London, New York and San Francisco. Read the full write up by the Gregor Robertson over at the Walrus.

18-34 year olds more likely to live with mom and dad

It used to be that most parents would provide their kids with food and shelter until they left high school. Some would stick around home while attending higher education, but most would move out on their own and start taking responsibility for themselves.

Then a funny thing happened in the economy.  Stuff changed. Incomes declined while the cost of living went up.

For the first time in modern history 18-34 year olds in the US are more likely living with their parents than on their own, with roommates or with a romantic partner.

A big reason is a decline in economic opportunities. As the cost of living has escalated and wages have stagnated, young people face mounting student debt and daunting barriers to renting or owning a home, creating obstacles to cohabitation and marriage.

The trend is led by young men, whose fortunes have been declining since the 1960s. While they have always lived with their parents in greater numbers than young women, this setup became the dominant living arrangement for them in 2009. In 2014 35 percent of young men lived with parents, while only 28 percent lived with a spouse or partner (for young women, the percentages are flipped: 29 and 35, respectively).

read the full article here.

Vancouver market now a national problem

Most people in Canada don’t care about the Vancouver housing market, but that doesn’t mean they would be unaffected by a bursting housing bubble here.

Canadian Business argues that what we need is a national regulator to deal with risks in the financial system:

In 2013, the International Monetary Fund called on Canada to create a federal entity with a clear mandate to monitor threats to the financial system. The IMF earlier this month scolded Ottawa for so far ignoring its advice.

The Vancouver house-price surge is exactly the sort of thing the independent agency should handle. It is a national issue: everyone knows who will be called on to clean up the mess if it bursts. The banks would feel it and likely would curb lending. CMHC would feel it because it has insured most of the mortgages Vancouverites have used to buy their inflated assets.

Unfortunately as a politician anything you could do about the housing market would most likely be political suicide. Owners are voters and nobody wants to see the value of their home drop.  Read the full article here.

Burnaby Breakfast on Housing Affordability for 1st time buyers

A while back NDP MLA David Eby held an ‘emergency meeting‘ on the Vancouver housing crisis.  (Presumably called a ‘crisis’ because the 25-44 age group is leaving Vancouver faster than they are arriving.)

But you should not be under the impression that the BC Liberals are sitting back and doing nothing about the housing situation here.

Not only have they announced new real estate rules to address many of your concerns, the minister responsible for housing will be attending a Burnaby North Breakfast on Friday May 20th about housing affordability for young first time buyers.

Tickets are only $20 and all proceeds go to support the Burnaby North Riding Association. If you are unable to make it, there is a convenient link to make a direct donation on the bottom of that page and there’s nothing that says donations are limited to developers only.