The Condo King has emerged from hibernation and seen no shadow: that means two more years of bubble.

“We no longer live in Vancouver. We live on the planet.”

With that remark, renowned Vancouver realtor Bob Rennie attempted to explain the evolution of this city’s exasperating housing market.

He made the comment last week to a conference of the Urban Land Institute, an organization representing realtors and developers who intimately understand what the condo guru was referring to.

Full article in the Vancouver Sun.

FFFA! Looooong weekend!

May 16th, 2014

Hey! It’s the end of another week.

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.

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

-New home prices down, old up
-Apathetic politicians?
-Carrick not worried about debt
-Low rates for higher prices?
-Analysts warn of market froth
-Bitter bear
-Condo ordered sold over parking
-

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

The Investors Group is making waves with a 1.99% 3 year variable mortgage.

Here’s a story about it over at the CBC.

The offer comes with strings attached — namely that you can’t break the mortgage for any fee during the three-year term, unless you sell your home. But the offer does come with the ability to double up monthly payments, or pay a 15 per cent lump sum once a year.

In real dollar terms, it could knock a lot of money off a mortgage payment, at least over the short term. A standard 25-year $500,000 mortgage at a five-year rate of 2.99 per cent works out to $2,364 a month. That mortgage under IG’s new terms would be $2,115 a month — savings of $249 monthly, at least for the first three years, and as long as the variable rate doesn’t increase.

This is from ‘the first one’s free’ school of marketing.  It looks like Investors Group is willing to lose money on mortgages in order to make it up with more business in the future.

It will be interesting to see if offers like this give a bump to the market and to see where we are with rates in 3 years.

Does this stat surprise you?

About 1 in 245 Canadians over 19 is a Real Estate Agent.

We have almost as many people in the country selling real estate as we have building it.

This according to an article in the Financial Post

Royal LePage chief executive Phil Soper blames this increase on what he calls ‘speculative’ agents.

“This is a real regional story. If you look at Quebec, where they took a different approach to licensing and professionalism by increasing the length of time and difficulty to get your licence, their ranks have shrunk,”

So who’s out there getting their real estate license?  Sounds like this is the easy path to riches and as long as we get enough churn in the market there should be plenty of commissions to go around, right?

Read the full article here.

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

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

Let’s get to it!

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

-Biggest new home price drop in Canada
-Average house price takes record fall
-Inflation adjusted HPI lower than 2008?
-New house prices lower than 2007?
-Condo owners ignore depreciation reports
-Cashback mortgages, great way to cash in on suckers
-Removed all 4′s from floors, Vegas tower still doomed
-

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

When you own something you might be delighted to hear that the price is rising.

Even if you don’t sell it to cash in, there’s a certain amount of psychological comfort to be found in owning something ‘valuable’.

So it’s not remarkable that many people are delighted by the rising cost of real estate in Canada.

But is this just the economic equivalent of a sugar high?  If all homes are rising in price you don’t really benefit from selling unless you leave the market or downsize to where the percentages are smaller.

Jonathan Miller, a US real estate appraiser posted an article comparing the US and Canadian markets.

He makes the point that sharply rising prices in US markets didn’t work out to be indicative of a markets health, rather they led to the inevitable hangover when the party was over.

Is it different here?

Hot at the edges

May 5th, 2014

Just in time for the spring buying season the Province newspaper has published a public service announcement about the hottest lower mainland markets.

What do the experts say are the hottest markets in BC?

1. Surrey
2.Maple Ridge / Pitt Meadows
3.Fort St. John
4.Dawson Creek

Surrey seems to do quite well with REIN – they took the number one investment spot in the province last year and also in 2012, 2011, and 2010.

Have you bought your surrey home yet?

FFFA! Condo Hell.

May 2nd, 2014

Ladies. Gentlemen. Does anyone have a timepiece on them?

What time is it?

Oh, yes. I see. It’s Friday Free-for-all time!

So lets waste no more time and hop right into it.  This is what we do at the end of every week, our traditional link round up and open topic discussion thread for the weekend.

Let’s go!

-Hell is life in a Condo
-$91M saves $1.1B Boondoggle
-Mo money, mo problems
-$1M mouse infested house
-Sad you can’t buy?
-25% regret buying a house
-

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

At first glance the new CMHC rules sounds like a minor tweak rather than a major change, and it might be just that.

When the CMHC announced the change they specified that the products being eliminated made up less than 3% of their insured mortgage products by number of mortgages.  What we haven’t seen anywhere are numbers in mortgage value, and BOM pointed this out yesterday:

Read this:

“The Crown corporation has been offering insurance on second homes since 2005. It has been offering insurance to self-employed people without strong income validation since 2007.”

And then read this:

“CMHC says its second home program and its self-employed-without-third-party-income-validation programs combined account for less than 3 per cent of its insurance business volumes in term of the numbers of mortgages insured.”

CHMC has a pool of mortgages insured accumulated over the last 25 years. They have only offered the products they are cancelling for 7 to 9 years but they make up 3% of that pool. Simple math indicates over the last 7 years about 10% of mortgages would have been part of the program they are cancelling otherwise it could never reach 3% of the total pool which was already significant prior to the program starting.

So how much demand was there for insured mortgages on second homes and mortgages for the self employed without income verification?  The numbers may be higher than we first thought.

CMHC: One home is enough?

April 28th, 2014

The CMHC has just ‘tightened’ their mortgage regulations again.

You might not have know that the CMHC would provide mortgage insurance on second homes, but they won’t anymore:

Canada Mortgage and Housing Corp. is cutting the types of mortgage insurance it offers, meaning the era of tighter rules for home buyers hasn’t come to an end.

The Crown corporation said late Friday it will stop insuring mortgages on second homes, effective May 30. Anyone who has an insured mortgage will no longer be able to act as a co-borrower on another mortgage that CMHC insures. In addition, it will stop offering mortgage insurance to self-employed people who don’t have standard documents to prove their income.

Gotta love that first sentence: The era of tighter rules hasn’t come to an end?  I guess by tighter rules they mean doing away with the most absurdist bubble policies in the form of zero down 40 year mortgages.

What’s next? Banks not being able to offload risk for mortgage lending?

Here’s the amazing bit for those just tuning in:

The Crown corporation has been offering insurance on second homes since 2005. It has been offering insurance to self-employed people without strong income validation since 2007.

Remember NINJA loans in the states?  Good thing we never had those here!

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