Category Archives: supply

Call for inquiry on Vancouver home contract flipping

The Globe and Mail recently published a story on contract flipping in Vancouver:

The probe reveals that homes are being flipped by assigning – selling – sales contracts before closing, for higher prices than what the original seller homeowner receives in the end. Assigning contracts like this is legal, but controversial.

Speculators who profit this way also don’t pay property transfer taxes, because technically the property doesn’t change hands until the deal closes.

Mr. Eby said he is hearing from upset constituents in his Point Grey riding, where many homes are demolished to make way for new investor-owned houses that sit empty, some resold several times.

There have been a number of reactions to this story, but most recently calls for an inquiry:

The technique, which brings profits for speculators but higher prices for buyers, has sparked a torrent of criticism in the province “The investigation needs to be independent because the government has already said it doesn’t think there is a problem,” said MLA David Eby.

Vancouver Mayor Gregor Robertson said after Saturday’s report that the province should impose a tax on speculators.

Read the full article here.

BC Premier Christy Clark has already said no to the province making any extra money off of sales to offshore buyers, but says now there will be a study on the impact of foreign buyers.  The government also proposes to raise the PTT exemption as a way to solve high housing costs without risking lower house prices for first time buyers.

It’s worth highlighting this comment from ‘shut it down already‘ who points out that this summary confuses the issue of offshore buyers and contract flipping which has the ‘racists running in circles’:

Rampant speculation generally resolves itself in the end. The other obvious contradiction is that we often hear people here saying that government intervention in the markets is the problem, yet now you want them to step in and intervene.

Don’t forget that the original sellers of an assigned property accepted a price that they were satisfied with. It’s only greed and jealousy that had them aghast that the buyer might resell for more than they paid.

The $6 Million tear-down

What would you call a 20 year old 7300 Sq foot house with brand new hardwood floors and an indoor pool?

In Vancouver we call that a tear down.

Property records show that the 7,300-square-foot house was last sold in 2013 for just over $6 million — the assessment today is $7.44 million. According to the 2013 listing for the property, it boasted $350,000 in recent renovations including new hardwood floors, a water purification system and windows. The listing sheet shows the two-storey house on a corner lot has 19 rooms including seven bedrooms, a media room, office and 12-foot by Seven-foot walk-in closet off the master suite.

…Well, we certainly know how to keep bulldozer operators and city dump workers employed!

Read the full article here.

Trapped in a starter home.

A funny thing happened on the way to financial security and easy riches, the condo promise in Vancouver didn’t really pan out for many young families according to a recent Vancity study.

The idea of a starter home is to get on the property ladder, then trade up as your family grows. But this doesn’t work as well when condo prices stagnate and single family home prices grow, especially when there are very few options available for 3-4 bedroom attached or condos.

Across the region, families who wish to move from a one-bedroom apartment or condo to a three-bedroom home with an attached yard would have to increase their debt level by an average of 95%. In Vancouver’s west side, this jumps to 158%. In the city’s east side, it is a much lower 78%. The biggest jump is found in White Rock, where debt levels would increase by an average of 164%.

Read the full article here.

Realtors not hungry

RFM has updated the Realtor Hunger Index over at VancouverPeak.

The VANCOUVER REALTOR HUNGER INDEX is the percent of realtors who earned no commission income for the stated month. For August 2015 the VRHI was 49%. How does this compare? The 18-year average for August is 50%. At 49%, the 2015 August VRHI was higher than 8 years and lower than 9 years since 1998.

Despite turmoil in the speculative equity markets, an ‘official’ recession in Canada, oil prices that are plumbing the bottom of the barrel, foreign money-laundering investigations by the Canada Revenue Agency, corrupt politicians, greedy realtors, rapacious real estate marketing firms and a plethora of other factors that should cause a collapse of the Vancouver housing bubble, continued lower-than-average inventory and strong demand forced already high prices higher, especially in single family homes, where the HPI increased a whopping 17.5% from August 2014 to $1,159,600. Endlessly-low interest rates (and clueless BOC leadership), a flood of foreign investment money and knee-jerk buying by uninformed and delusional buyers, the August sales rate is extraordinary! And unsustainable. My official opinion of all this is available 24/7/365 for US$0.05! Call now! Operators standing by! However, for a more detailed and scientific analysis of the market dynamics of this firestorm, consult the DSM-5! (The Diagnostic and Statistical Manual of Mental Disorders (DSM-5), published by the American Psychiatric Association, offers a common language and standard criteria for the classification of mental disorders.)

Details and comparison data for 18 years at: http://vancouverpeak.com/showthread.php?tid=64

Do we have what it takes to draw ‘top talent’?

There’s an article over at the Globe and Mail about the difficulty faced by Tech startups in Vancouver – apparently it can be a challenge to attract top talent.

Vancouver is awash in startups with several poised to go public, transforming British Columbia’s economy as they grow. But for Canada’s lifestyle capital to emerge as a world-class tech hub it needs to figure out how to persuade top executives to actually move there (because hey, Silicon Valley has mountains and ocean too)

Meanwhile there’s a local company called Telus that just lost a CEO because he didn’t want to live in Western Canada.

Can you believe that? Not wanting to live in BC?!

Boggles the mind.

Realtors hungry no more!

Home buyers may be eating a lot of Kraft Dinner but Realtors are doing fine.  From RFM over at Vancouver Peak:

The VANCOUVER REALTOR HUNGER INDEX is the percent of realtors who earned no commission income for the stated month. For June 2015 the VRHI was 34%. How does this compare? The 18-year average for June is 39%. At 34%, the 2015 June VRHI was higher than 8 years and lower than 9 years since 1998.

The lowest June inventory in nine (9) years and strong demand forced already high prices higher, especially in single family homes, where the HPI reached a stratospheric $1,123,900. Fueled by continuing historically low interest rates, a flood of foreign investment money and panic buying by uninformed and delusional buyers, the June sales rate is extraordinary! And unsustainable. And prices are unsupportable. For a complete analysis of the market dynamics of this firestorm, consult the DSM-5! (The Diagnostic and Statistical Manual of Mental Disorders (DSM-5), published by the American Psychiatric Association, offers a common language and standard criteria for the classification of mental disorders.)

Details and comparison data for 18 years at: http://vancouverpeak.com/showthread.php?tid=64

Locals only

A local developer has figured out a good way to get attention on an 18 million luxury penthouse that has remained unsold since 2012: say its for locals only.

Call it exclusionary, or tapping into the zeitgeist, or just a clever promotional scheme. Langereis says he wants a purchaser who will “commit” to this space and the city, and who will actually live here. If not year-round, then at least most of the time.

He wants to look up from street-level and see the lights on. “I want someone fun, someone who will connect with the rest of residents,” says Langereis. “Not someone who treats this place like some hidden chamber and then leaves.”

Read the full article here.

Bob Rennie urges Vancouverites to give up

The owner of a condo marketing company in Vancouver is urging young families to give up on the dream of a single family home and embrace density.

According to Rennie, whose company was involved in high-profile projects like Vancouver’s Olympic Village and the redevelopment of the historic Woodward’s building, planners need to create a lot of density at once in order to drive down prices.

“I know nobody wants to hear that, but unless we’re going to take a big broad brush stroke and add a lot of density, we’re in trouble,” he said.

Read the original article over at the CBC.

Vancouver Realtors getting less hungry.

RFM has posted an updated Vancouver Realtor Hunger Index for April 2015.

The index now stands at 37%.

As RFM says:

he VANCOUVER REALTOR HUNGER INDEX is the percent of realtors who earned no commission income for the stated month. For April 2015 the VRHI was 37%. How does this compare? The 18-year average for April is 41%. At 37%, the 2015 April VRHI was higher than 5 years, the same as one year and lower than 11 years since 1998. Sales outpacing listings? Prices strongly increasing? Consult the DSM-5 for a complete explanation! (The Diagnostic and Statistical Manual of Mental Disorders (DSM-5), published by the American Psychiatric Association, offers a common language and standard criteria for the classification of mental disorders.)

Details and comparison data for 18 years at: http://vancouverpeak.com/showthread.php?tid=64

Report your neighbours vacant home

The city of Vancouver is looking at the issue of vacant homes and has expressed interest in building a website to allow people to report vacancies.

“We’ve all heard people asking why Vancouver is so expensive and telling us to look at all these empty houses. It’s a persistent question, so let’s get to the bottom of it and find out,” Coun. Kerry Jang said on Sunday.

Jang said he often receives feedback from frustrated residents blaming vacant homes and prospective foreign owners on Vancouver’s high housing prices, but the city is unsure whether those claims are justified and to what extent.

Jang said he personally is unsure whether those claims are true or not.
“That’s what we’re trying to find out,” he said.

Read the full article over at metronews.