Rent to own?

September 11th, 2014

At least one local developer has struck on an ‘innovative’ way to rent out their property: rent to own.

Just like TV and Furniture in the 80s, you can rent to own a condo.

Under the plan, 15 per cent of a tenant’s monthly rent goes into a credit account. That money can then be used in the future for a down payment on a new Bosa home purchase, to a maximum of three per cent of the home’s value.

This should appeal to someone who is having difficulty finding a unit for 15% less and putting the money away themselves.

Global RE frothy again

September 8th, 2014

After housing markets slumped around the globe governments and central banks did what they could to reinflate them, driving down the cost of debt.

Well it worked.

The US market is down a bit from their precrash highs, but Canada is sailing high.  What’s the endgame?

With global monetary conditions so loose, governments are using regulatory tools to cool overheated housing markets. In Canada, for example, the maximum term of the riskiest mortgages has been lowered from 40 to 25 years. Regulators in both Hong Kong and Singapore have repeatedly raised stamp duties and tightened lending restrictions. The measures seem finally to be working, especially in Singapore, where prices are now falling.

So as potential home buyer on planet earth, what’s your next move? Do you go with low interest rates forever as a way to keep prices up, or do you stand back and wait for a price correction?

As an aside its interesting to note one nation whose market isn’t doing so well is Japan, where they’ve had rock bottom interest rates for a really long time.

Friday free-for-all!

September 5th, 2014

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

This is our regular end of the week news round up and open topic discussion thread for the weekend.

-news links to come?

So what are you seeing out there?

Post your news links, thoughts and anecdotes here and have an excellent weekend!

The middle class is doomed.

You may have heard of that internal Conservative Government report on the middle class prepared by Employment and Social Development Canada even though it was never released.

The Canadian Press used the Access to Information Act to get a copy and it’s mostly remarkable due to some of its blunt take-aways:

“The market does not reward middle-income families so well,” says the report. “As a result, they get an increasingly smaller share of the earnings pie” compared with higher-income families.

The report also refers to debt, saying “many in the middle spend more than they earn, mortgaging their future to sustain their current consumption.”

“Over the medium term, middle-income Canadians are unlikely to move to higher income brackets, i.e., the ‘Canadian dream’ is a myth more than a reality.”

Well it turns out that there’s another way to look at the same data, as Finance Canada has just done.

“Their analysis arrives at conclusions — namely that middle-income families have stagnant wages, are unlikely to move to higher income groups, and are increasingly indebted — which appear to conflict with the general message in Budget 2014 and previous internal briefings,” says an accompanying briefing note for Oliver.

The new report points out that moving from single earner to double earner households as more women have joined the workforce has acted to keep the middle class afloat.

The Finance Canada report estimates about 70 per cent of the increase in middle-class household incomes since the mid-1990s can be attributed to higher workforce participation rates, primarily by women workers.

“There is no second wave of women, spouses, entering the workforce,” said New Democrat MP Nathan Cullen, the opposition’s finance critic.

Of course the MP is being overly pessimistic without cause, there’s an obvious next wave of income for households and it doesn’t require polygamy.

The children are our future.

It’s time for Canada to get in line with global economic trends and fully utilize the productivity of the available workforce.  We have a large population of potential workers that remain untapped.

Instead of wasting tax dollars and time in school, children could be gaining valuable experience cleaning homes, mining coal or any number of other jobs to help support the household. Lets not squander this bright future opportunity, let’s put the kids to work!

The Economist magazine has named the Canadian housing market among the most overvalued in the world. (Even though they love our cities)

Measured using price-to-rent and price-to-income ratios, the Economist says housing markets are at least 25 per cent overvalued in nine of the 23 economies it tracked.

When comparing the relationship between the costs of buying and renting, it cited Canada, Hong Kong and New Zealand as “the most glaring examples” of overheated markets.

“The overshoot in these economies and others bears an unhappy resemblance to the situation that prevailed in America at the height of its boom, just before the financial crisis,” the magazine states.

Read the full article here.

Hat-tip to kabloona for the link.

It’s the end of another week, time for a long weekend!

And since it’s Friday that means it’s time for our regular end of the week news round-up and open topic discussion thread for the weekend.

Here are a few recent links to kick off the chat:

-Banks in trouble if bubble pops
-WTF is the HPI?
-Cost of debt dips
-High end sales dip just a blip?
-Crash fears rising
-US new home sales slide
-China RE price drop trigger protests

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

Astute reader ‘reveal the truth‘ pointed out a few similarities between a recent Business in Vancouver article about people buying in the suburbs and an earlier article published in June:

Millenials Decamp to Suburbs”, published August 20, 2014, sure sounds a lot like “First Time Homebuyers Driving Surrey Market”, published June 24th.

Let’s see:
June 24th: Shayna Thow, director of sales for BLVD Marketing Group – which handles marketing for two Surrey developments for Vancouver’s Fairborne Homes Ltd. – said Surrey has become a viable option for first-time homebuyers who can’t afford to buy in Vancouver. While the average price for a single-family detached home in Greater Vancouver has soared to more than $1.36 million, the average price in the Fraser Valley is still under $655,000.

August 20th: Shayna Thow, director of sales for BLVD Marketing Group – which handles marketing for two Surrey developments for Vancouver’s Fairborne Homes Ltd. – said Surrey has also become a viable option for first-time homebuyers who can’t afford to buy in Vancouver. While the average price for a single-family detached home in Greater Vancouver has soared to more than $1.36 million, the average price in the Fraser Valley is still under $600,000, she noted.

Uh-oh. The only thing that stayed the same was the word for word structure. The PRICE however showed a DROP of nearly 10%! Yikes!!

!

Hey looky here, it’s another weekend!

That means it’s time for our regular end of the week news roundup and open topic discussion thread for the weekend.

Here are a few recent links to kick off the chat:

-Millenials decamp to suburbs
-80% of renters under 50 want to own
-CANY VS COV
-Do you trust developers?
-Rents softening in Toronto
-AFL: scrap foreign worker program
-Cooling down in London

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

There’s a magazine called the economist and sometimes they rank cities based on a number of factors. One of these factors is not the cost of living.

This year three Canadian cities made the top ten: Vancouver, Toronto and Calgary took 3rd, 4th and 5th place.

When a five-year view is taken, global liveability has declined by 0.68 percentage points, highlighting the fact that the last five years have been characterised by heightened unrest in the wake of the global economic crisis, which has undermined many of the developmental gains that cities may have experienced through public policy and investment,” the report said.

Read more: http://calgary.ctvnews.ca/calgary-makes-top-ten-list-of-livable-cities-1.1966845#ixzz3AwisPTPr

FFFA! Let’s weekend!

August 15th, 2014

You made it to the end of another week and that means it’s time for our regular end of the week news round up and open topic discussion thread.

Here are a few links to kick off the chat:

-Poloz closed door speech breaks custom
-CMHC: on course for soft landing
-TD: housing starts unsustainable
-Statscan rushing to redo July jobs data
-Apartments vs inflation
-OECD better life index

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

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