Developers kindly provide support to government

Those of you who complain about the local real estate market should calm down and take a moment to reflect on the benefits of the current situation.

Without financial support from real estate developers how would the provincial government be able to provide necessities like salary top-ups for the premiere?

Without fundraising  by condo marketers it would be you the taxpayer that would have to pay for that extra $300k given to the premiere since 2011.

And if you’re concerned about conflicts of interest, don’t be! The premiere herself has addressed this issue:

‘The issue for us is to make sure we always separate our public duties from any sources of funding for political parties, and I think that’s the most important thing for all of us to remember,” Clark has reportedly said in defense of the stipend. ”I always keep that utmost in my mind when we’re making decisions.”

If you want to read David Ebys concerns about the current situation, you can find them over at the Tyee but  just remember, he’s likely motivated by sour grapes or jealousy.  After all, Eby has been stuck with the MLA responsibilities for Vancouver Point Grey for the last few years while Clark gets to enjoy Kelowna.

Inching towards instability

Canada’s housing market is overheating.

Don’t worry, there’s no risk of a crash yet and further action by the federal government is expect to cool things down.

This according to Bank of America Merrill Lynch economist Emanuella Enenajor.

And, perhaps more importantly, she noted that “it’s different this time” because the Federal Reserve is in the midst of gradually raising interest rates.

“Economists and investors have become numb to signs of housing excess, as the sector has defied gravity for years,” Ms. Enenajor said.

“However, as the Fed gradually exits its accommodative policy, medium-term rates in Canada could also rise.”

This, she warned, heightens the threat of a correction in Canada’s housing market.

Read the full article over at the Globe and Mail.

 

Friday Free-for-all! April 29th 2016

You made it to the end of another work week!

And most of you are still living in Vancouver, which means you love it and find it worth the price. Good job!

With the weekend here it’s time for another Friday Free-for-all, our regular end of the week news link round up and open topic discussion thread for the weekend.  Here are a few links to kick off the chat:

CMHC: Many markets overvalued
Fed leaves rate flat
Donors top up Clarks’ salary
US Ownership rate falls to 48 year low
Who’s at the open house?
How is Comox?
How is Kelowna?
Danger in the bond market

So what are you seeing out there? Post your news links, thoughts and anecdotes here and have an excellent weekend!

Before buying real estate, create a bare trust

You know what the difference between you and the wealthy is?

The wealthy have lots of money.

And they tend to keep hold of it by using perfectly legal techniques such as buying and selling real estate within a bare trust to avoid taxes. One recent example prevented more than $2 million from from being vacuumed up into government coffers.

Green Party MLA Andrew Weaver has been concerned about the bare trust for the last two years, highlighting the need to fix the loophole.

He says people who are very wealthy or investing from abroad would be recommended by astute accountants to purchase their house using the loophole.

“Every time most people buy and sell a house, they’re paying property transfer tax. It’s only the wealthy and the wise who would actually buy in bare trust,” said Weaver.

“As a society, if every single person created a bare trust and bought every property in a bare trust there would be no more property transfer tax collected in British Columbia… there’s no reason not to change it.”

Just think of the efficiencies and tax dollars saved if every real estate transaction in BC happened through a bare trust. Less money spent in taxes means more money flowing into a supporting a healthy local economy. Bare trusts for all!

The negative side of overpriced real estate

Over at MoneySense they have a list of 4 casualties of the Vancouver real estate market.

The first one isn’t really a negative though, it’s just people jumping into the market without any conditions or clauses and taking on the risks that entails. That only affects willing participants in the market.

The other 3 points affect everyone – Empty zombie neighborhoods, high rental prices and fewer options for local food.

…land prices in the rich and productive soils of the Fraser River delta have risen and now sell in the range of $80,000 to $110,000 per acre. While prices can drop for parcels of land greater than five acres, these price increases are setting off alarm bells, especially when paired with statistics from agricultural lender Farm Credit Canada that show that any land priced above $80,000 per acre makes farming unsustainable.

Read the full article here.

 

Friday Free-for-all!

Hey, the weekend is nigh!

Let’s kick it off with another traditional Friday Free-for-all post – this is our news round up and open topic discussion thread for the weekend.

Here are a few links to kick off the chat:

millionaire investors pay avg yearly tax of $1400
saving for down payment a struggle
born too late
stampede to overpay
worlds loneliest city
earn the least, pay the most
negative mortgage rates

So what are you seeing out there? Post your news links, thoughts and anecdotes here and have an excellent weekend!

VSB seeks input on Kingsgate Mall

Did you know that the Vancouver School Board owns the land under Kingsgate Mall?

Well now you do.

The VSB is seeking ideas on what to do with this asset due to current budget shortfalls.

Surprisingly, the modest little mall has also been generating big money for the Vancouver School Board — upwards of $750,000 per year, The VSB has owned the East Broadway and Kingsway lot on which the mall sits since 1892 when the long-gone False Creek School first opened on the site.

But 124 years later and facing a $24 million budget shortfall, the VSB is now contemplating its future with Kingsgate, and asking for public input.

“One of the questions we’re asking is what do you think the school board should do with it,” said VSB chairman Mike Lombardi.

According to Lombardi, the VSB could see revenue from the property increase to $2 million annually — money which flows directly into the operations budget, offsetting the deficit. The lease with mall operator, Beedie Development Group is set to be renegotiated next year.

Selling the land is also a possibility, although money raised from a sale won’t help the budget shortfall because it would be restricted to capital projects like new school construction and building upgrades.

Read the full article over at the CBC.

Is Alberta now a buying opportunity?

The oil market has had an effect on house prices in Alberta.  Now with prices lower than they were a year ago does Alberta pose a good buying opportunity for real estate investors?

Don Pittis over at CBC says maybe not yet.

According to long time investment adviser and real estate guru Hilliard MacBeth, the bargain hunting in Alberta has already started.

“I’ve heard of lots of people who say, ‘The prices are down. I’m going to jump in,'” said MacBeth, Edmonton-based author of When the Bubble Bursts.

In fact, some of the people he advises have already identified a buying opportunity and jumped into the market, at least on behalf of their kids, who they are helping out in the role of bank of mom and dad.

“I would have counselled them against it,” said MacBeth by phone as he put on his ski boots in the Lake Louise parking lot. “I would have said, ‘Wait,’ because we’re early days yet.”

It’s more exciting to buy when prices are rising, so maybe try the Fraser Valley instead, where prices are up 27% over a year ago and they don’t have high paying oil jobs to lose.

“One of the things that was supporting Alberta home prices was the fact that our incomes were 40 to 50 per cent higher than the rest of Canada, and that’s changing very rapidly,” said MacBeth.

But property owners and prospective buyers elsewhere would be wise to watch and see if, indeed, the plunge is nipped in the bud by bargain hunters or whether prices continue to fall for a while yet.

Read the full article here.

Friday Free-for-all! April 14th 2016

It’s the end of another week and that means it’s time for another Friday Free-for-all!

This is our regular end of the week news round-up and open topic discussion for the weekend, here are a few recent links to kick off the chat:

Eby on Real Estate Fraud
Affordable Housing Program
Nothing free-market about boom
Concord Pacific buys Molson land
Gentle jaw-boning for looney
Southseacompany on YouTube
Tricks of the trade
Millennials scramble before priced out
Downgraded growth for Canada
Your parents made money, you won’t
Poloz stuck in corner?
Research Chair escapes from UBC
Harsher penalties needed?

So what are you seeing out there? Post your news links, thoughts and anecdotes here and have an excellent weekend!

Replica cities lack something

The economic miracle in China has led to the creation of many ‘fake’ replica cities; Paris, London, Jackson Hole, etc.  Despite features like a 1/3 replica of the Eiffel Tower, a modified Tower Bridge and Route 66 these ‘duplitecture’ cities are missing something according to this piece over at ABC Nightline.

Is it Joie de vivre? Culture? or simply population? Apparently if you build it, they won’t necessarily come right away.

Tianducheng, or “Sky Capital City,” is a real estate development modeled after the city of lights, right down to a version of the Eiffel Tower that is one-third the height of the real one.

“I think [it’s] a little strange,” Rachel Ni, who moved to Tianducheng six years ago, told ABC News’ “Nightline.” “I don’t like it here.”

Unlike the real Paris, laundry hangs in full view everywhere in Tianducheng, even on trees, and the fountains are dry. Many apartments are empty, and few stores are even open for business.

“I live here because it’s cheap. In Hangzhou, this is very, very cheap,” said Ni. “The environment is good, especially for the baby.”

Is it jealously that made ABC find a negative angle on this? Replica theme park cities sound great, think of the savings on travel budget!  Just imagine if we could have a replica Interlaken in Stanley park, a tiny NYC on the east side or Honolulu in Poco…  Read the full article and view the video here.