Housing bubble pushes out young tech workers

According to this article in the Financial Post Millennials are ‘fleeing Vancouver‘ and moving to cities where they can afford housing.

As housing costs have risen, so have the number of people in their twenties and thirties leaving the city. The net number of people age 18 to 24 added to Vancouver’s population was the lowest ever last year, at 884, and the number of 25-to-44-year-olds decreased by about 1,300, the biggest decline since 2007, according to Statistics Canada.

The tech industry is currently one of the key drivers of economic growth in the area, but they’re noticing the shift:

That driver of growth may evaporate as talent exits Vancouver, said Christine Duhaime, founder and executive director of the Digital Finance Institute, which supports Canada’s financial-technology industry. She’s having a tough time filling a 2,000-square-foot (186-square-meter) open-concept office for startups in Vancouver’s historic Gastown neighborhood she opened this year because potential tenants say they’re leaving the city for Victoria, Kelowna and as far away as London and Singapore.

“We’re banging our heads on the wall,” she said. “Why aren’t they staying? Because it’s too expensive. Vancouver is going to lose its tech edge.”

The nearest towns that seem to be benefiting from the exodus of young tech workers are Victoria and Kelowna. Read the full article over at the Financial Post.

Friday Free-for-all! March 10th 2016

Another grand week in paradise draws to a close, the weekend awaits.

And you know what that means? That means it’s Free-for-all time, our regular end of the week news round up and open topic discussion thread for the weekend.

Here are a few links to kick off the chat:

Bank of Canada good on rates
We’re building lots of condos
Who’s doing what
We’re not realtors
Think of the children
Local demand irrelevant?
Empty homes are low

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

CMHC looks to define foreign money

How would you go about trying to determine how much foreign money is going into Canadian real estate? The CMHC is now trying to figure that out.

A core team of analysts at CMHC held several meetings to discuss how best to tackle the data gap. Researchers had initial meetings with agencies including the Canada Revenue Agency and Fintrac, CMHC confirmed. The Financial Transactions and Reports Analysis Centre of Canada monitors money laundering and out-of-country transactions of at least $10,000. The documents show CMHC also planned or had meetings with the Bank of Canada, British Columbia’s housing and property assessment agencies, and the department of finance to start a data working group.

So why are we missing that information and how much real estate is owned by people outside the country?

After meetings with realtors, lawyers and condo developers in Vancouver, CMHC market analysts pointed to the lack of transparency in the market. Realtors often don’t see residency status or identification such as a passport, and that information isn’t stored electronically at the brokerage. Lawyers and bankers who run the transaction aren’t obligated to pass on residency information and buyers don’t regularly check a citizenship box when paying land-transfer tax.

“Conveyance is done through the lawyers and bankers,” minutes from a meeting show. “Money transfers should get passed onto Fintrac. Whether this is taking place or not is an issue.”

Previously, CMHC has tried to glean the scope of foreign investment with a survey of property managers that found less than 6 per cent of condos were bought by people who reside outside the country.

Read the full article over at the Financial Post.

Vancouver Emergency Housing Town Hall

At least one local politician seems to think that house prices in Vancouver are not just a problem, but an emergency.

David Eby is hosting an ‘Emergency Housing Town Hall‘ on March 16th at the St. James Community Square on West 10th.

Join MLA David Eby and local experts for an Emergency Housing Town Hall

This meeting is to discuss the causes of, and solutions to, an out-of-control real estate market in the Lower Mainland that has little or no connection to average household income. Issues of international speculation in our housing market, shadow flipping, real estate agent accountability, and other concerns will be addressed. Bring your stories, questions and concerns. The media, along with MLAs from both sides of the legislature, both BC Liberal and BC NDP, will be invited.

This is a meeting to hear stories, demand answers, and send a message to the Premier and the government to start to value the people of Metro Vancouver who make the communities we call home possible.

For full details see the event page here.

Friday Free-for-all! March 4th 2016

The weekend is almost here and that means it’s time for another Friday Free-for-all!

This is our standard 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:

Unconditional offers the new normal
$1 million over asking
Bubbles bursting everywhere
PC city councillor not PC
New York vs Vancouver
Kleptocracy Tour

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

Mark Carney vs. The Race below Zero

Mark Carney (why does that name sound familiar?), The Current Head of the Bank of England is speaking out against negative interest rates.

While defending ‘monetary stimulus’ he points out that negative interest rates haven’t done much to improve economies and is instead a game of hot potato where everyone loses:

So negative interest rates are effective in only one way: via the exchange rate – or as he says, “via beggar-thy-neighbor” – which might be “an attractive route to boost activity” for an individual country. “But for the world as a whole,” this “transfer of demand weakness elsewhere is ultimately a zero sum game.

Read the full article over at business insider.

More propaganda from the pro-renting cabal

The highly secretive pro-renting cabal that runs the local media have another article out comparing renting to owning with an obvious preference given to renting:

Not only did renting give her more options for places, put an extra $700 a month in her pocket and get her off the hook for repairs, maintenance, property taxes and the day-to-day responsibilities of ownership, it also gave her more options to live her life.

“If I had purchased in Vancouver, my future for the next many years is set (in stone),” said Yee, who is now happily living in a 685-square-foot, two-bedroom laneway house with her partner in her dream neighbourhood of Mount Pleasant for $1,650 a month.

“With renting, I can do whatever I want. It’s so freeing and valuable to me.”

They also paint ownership in a negative light:

Putting all your eggs in one very expensive and non-liquid item over the expense of other assets doesn’t make financial sense, say some experts.

Hannah says unprepared homeowners can end up more stressed and in debt than renters. Studies have also shown homeowners aren’t happier than renters. They have less leisure time and derive more pain than joy from their homes.

Will the media stop at nothing in their portrayal of renting as a superior life choice?

Read the full article here. Thanks to southseacompany for the link. Krystal Yee runs a personal finance blog that can be found at givemebackmyfivebucks.com.

Friday Free-for-all! Feb 26 2016

It’s time for another Friday Free-for-all!

This is 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:

BOC raises flag on debt
Local buyers pay $750k over ask
70s vancouver tourism ad
January sales hit 6 year high
A short or long term rental?
Shorter border line-ups
Inflation up, spending down

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

The 140 sq ft apartment

‘Microlofts’ aren’t a new thing, but they seem to be getting smaller.

Enter the ‘Nanosuite’.

UBC has announced they will will be building 140 square foot apartments for student housing.

That’s still bigger than living in a van, but not everyone seems enchanted with the idea.

Reaction was mixed.

“I think they’re pretty cool,” said international economics student Raj Singh, 19.

“They have many things that you might not get in campus residences, for example a private washroom. But I’m like a really messy person, so if I were to move in there, it would be a disaster.”

“They’re very small,” said economics student Chun Lok Tse, 18.

“It’s kind of strange to not have a table and a bed at the same time. I’ve seen the prices online, $675 a month. For not a lot more you can get a better room, which shares a kitchen with three other people. I’d much prefer those to these.”

His friend Kennedee Fung agreed.

“Where I’m from in Asia, houses are famous for being small,” she said.

“And this is even smaller than the ones we usually live in. So it’s kind of ridiculous.

“I really don’t like the idea that you have to pull down your bed every time you want to work or sleep, I think that is quite a hassle. Also there isn’t much storage space.

“Although you have a kitchen and a bathroom, as an international student, you have suitcases, and you wouldn’t know where to put them.”

Read the full article over at the Vancouver Sun.

Get outta town.

What happens when house prices keep going up and wages don’t keep up? Well, apparently you get young families shoved further and further out of the city:

“It’s getting to the point where you have to leave and find another job and maybe relocate,” she says. “I have friends who were lucky, they purchased three months ago and bought a home off the highway in Abbotsford for $475,000, and there’s no backyard. This is what it’s now become.”

Expensive housing is making it harder to find employees, not just in the office and restaurant business, but in the tech world as well:

“I just went through this. I asked a guy, ‘Would you come work for us?’ He lives in a $1-million house in Calgary and he’s a senior engineer. And he said, ‘there’s no way I’m moving there. I lived in Burnaby in the nineties, and I couldn’t buy that house again.’

“It totally shuts down the conversation. They say, ‘I know house prices. You guys can’t pay me enough.’”

Read the full article over at the Globe and Mail.

Bubble? What Bubble?