I'm not overly pessimistic that it's intended as predatory lending, because unlike Alt-A style mortgages that were sold to Americans who clearly could not manage money, a well informed buyer would understand that in five years the mortgage will increase and be prepared for it.

I don't agree with your assessment.

A very small percentage of people buy in the Fraser Valley, because they can't afford what you would consider a nice area. They buy in the Valley, because they want to live a certain lifestyle, which is supported by the million dollar housing developments in East Abbotsford and North Langley. The difference in value between Langley and Abbotsford, despite being only fifteen minutes apart is significant. With Abbotsford's amenities improving it's logical to reason that it would begin to catch up with Langley prices.

Okay, the construction industry should be bracing for a downturn.

I referenced apprentices, who are not exclusively in the construction industry, and health care workers, an industry that's unlikely to see a downturn for decades, as examples of young professionals at the lower end of the pay scale. You picked out one very specific industry among that group of workers I cited and acted as if it is a fatal flaw to my argument, which it is not, because my argument was more diverse than that.

You can disagree all you want, the numbers don't lie and the examples elsewhere tell the same story. Either learn from history, or repeat it.

I picked the first industry of a series of dominos. It is a fatal flaw cause the BC economy has been heavily reliant on construction and retail spending, and a lot of BC residents are migrants. You can already see people leaving the interior for "home" since BC was never "home", just a destination for awhile. You can look at BC history and see that when hard times hit, people leave.

You can continue to say "it is different here" yet history has proved otherwise. The tide has turned in BC, now we're waiting to see where its headed. Flat for a decade, or down - all these "incentives" are not going to spur it back up.

Don't tell me that...I want so desperately to go and renovate other people's homes again. If I build one more version of the same apartment again, I'm gonna ralph.

I'm up to 70 gallons of the same color.

I agree. Even the last incentive for construction from the feds really didn't do a whole lot. No one is willing to do what needs to be done to make it cash in hand today for customers.

No sales tax.

You get money...today. No credits or bullshit.

But even if you do that, you cannibalize future work. Some people will say, let's do the floors. Great. Even if they weren't realistically thinking of doing it. Most would be people choosing to go now, instead of later. Or, we were going to do it anyway, now we do it cheaper. It's the same with a tax credit.

Ultimately, for construction, you really need people moving. At least in my experience. I would have clients living in the home about 1 out of every 6 to 8 places. The rest were all condos that they bought and wanted rehabbed before occupation.

That's not really a statistic you can use :) I specialize in interior work and for some reason, I ended up with apartments and condos as my base.

My brother is a general contractor in Montreal and he's noticed work has slowed there too. Tax breaks only bring work forward, once the home reno tax credit disappeared, the calls slowed down.

Thus why I am pessimistic about these tax credits in this budget. We've never recovered from the slump, and while this may bring some business forward, it doesn't establish anything to replace that once the stimulus ends.

First-time buyer bonus will make

Do I have it wrong? or does the author of this article?

Its a $10K tax credit, which means it raises the lower threshold for not paying provincial income tax - not federal income tax. The BC income tax rate is 5.06% for the first $37K of income, with a $11.3K personal amount (aka untaxable).

This means you get.... rum roll please.... a refund of $506.

This is exactly what I have been trying to figure out. No one hands you 10k. It's just a tax credit which means it reduces the amount of income tax you will pay.

I wrote the author of the article to correct it, yet fear the damage is already done. Going to be lots of disappointed people filing their 2012 taxes.

The arguments you make are incredibly weak, making such bold statements you need to provide much more support for them to have any validity.

Low interest rates in the initial term is not enough to confirm predatory lending, period. If that were the case, every lender who offered a 2.25% fixed rate mortgage in 2009 was engaging in predatory lending. The buyers aren't being offered 100% financing or alt-a and subprime mortgages, essential to the down falls in the examples you mention.

Again, your argument is completely illogical and totally unclear.

I have never seen a statistic that shows a significant emigration from Canada or specifically British Columbia and you failed to provide one, therefore your argument is conjecture and not worth addressing further.

Regarding a minor downturn in the BC economy as a direct result of a slow construction industry, that's plausible. An adjustment in value of over inflated markets would result, specifically in areas like Vancouver and Richmond where prices are much higher than is logical. When a market improves however, the value goes up. Abbotsford and areas of Surrey have steadily improved, therefore the values in this regions will go up.

Bringing work forward is precisely what tax credits do, they're ineffective.

I never been told by a customer, I'm doing this job because of the tax breaks. The closest I've ever heard to that is, the tax credits are a nice addition to the ecoenergy grants. The ecoenergy credit program should expand, because it continues to be extremely effective and creates a good amount of business for contractors who take advantage of it.

Fixed rates have never been that low. Variable rates can be, yet you have to qualify at a much higher rate - which most making $15/hr buying $200K properties wouldn't be approved for.

In the case you mention, the developer is subsidizing loans, which might as well be ARMs or Alt-As since they will reset higher. The only difference is semantics, not economics.

The article I linked confirms what I have already said - most buyers leave 5% down and struggle to save for a downpayment. 5% down incurs a 2.75% CMHC fee which most roll into their mortgage, thus you are mortgaging ~98% of the house value - excuse me if I round up to 100%.

That's cause you've never looked. They are out there, I've linked them in many threads on similar topics. Just cause you're ignorant, doesn't mean I'm wrong.

When the US housing bubble popped it took down areas that were not even overpriced. Why? Cause prices were based on emotion, not fundamentals.

Fundamentally Abbotsford is overpriced for what it offers compared to similar population centres in the rest of Canada. The only reason it is priced as high as it is is cause it rides the BC wave of emotional house buying that pushed prices higher.

If Vancouver collapses, its taking the whole province with it in some way - no-one will be immune. We're already seeing the interior and the island down, if Vancouver goes down these areas will tank.

The only properties I have seen offered by the $15 developer are in the $150-160k range, not $200k.

As I have repeatedly stated, your 5% down figure is completely irrelevant, because it differs from the figures used to establish $15 as affordable.

Typical Taylor, when you can't defend your position you turn to childish insults. As the presenter of the argument it is your job to provide support for it, not mine.

That's all your opinion, which you're completely entitled to.

You'll need to provide evidence that Abbotsford is overpriced compared to comparable population centers if you want that statement to be in the least bit persuasive. I've already stated, as a result of investment by both the city and business Abbotsford has fundamentally changed. As a result, value will increase. The entire British Columbia housing market may decline, but the changes to Abbotsford will mitigate the effect on it specifically.

People make me laugh on the radio when they talk about liquor distribution.
Do they not realize booze prices will go up? The government can regulate liquor prices private and do what they want. They talk about this company from Alberta coming and buying it. So let me get this right its ok to put those workers out of work but its ok to make the rich richer and give them more money, more then they will ever need? Oh dont get me wrong the privates will provide jobs ....... for $10 an hour. Yah thats a fair wage.
People need to think long term and not just for the short term.

We can't do it all. I don't want government positions taken up with handling the distribution of liquor. I would like government bureaucrats working on economic issues and things that move the province forward.

People are going to lose their jobs. Ok. Shit! People lose their jobs. It happens. Cut them a check, and move on. The private companies will pay people like $10/to work cash. Then I guess that's what people are worth in a position that includes the following dialogue:

Hi! Planning to get wasted tonight? Can I see your ID? Beep beep beep. Have a good night!

Yes, I know there is more responsibility to it than my dramatically over-simplified scenario, but my point is, do I need to pay a guy 40k a year to do it?

Here's just one example calling for the same thing.

To Whom It May Concern At The BC Liquor Distribution Branch… : Scout Magazine

I don't need the government to decide how, what and why I consume alcohol, and discourage me from doing so with sky high pricing. I'm not an alcoholic, and I don't intend to become one. I don't drink and drive and I don't intend to start. Kill it.

One more thing, and I haven't found an answer online. Is BCLiquor self-sustaining financially, or do we top up?

Massively profitable, approximately $900 million per year, I believe.

I am very much a socialist, so I like seeing that income going directly to the government. Not only does it help to fund education, healthcare and et cetera, but it acts as taxes in a sense. Alcohol is the most prolific drug in existence, there is a significant social cost resulting from it's availability, LBD profits displace that cost.

Reforming the system, I support.
Auctioning off the system and switching to an Alberta style privatized system, I do not support.

One note: While average wages at BC liquor stores remain high due to the union, the starting wages have dropped significantly.

Grid, I think you'll love this article, it's very well written and in strong favor of your position.
B.C.'s liquor rules still sting | Vancouver, Canada | Straight.com

Mindbomber, seems me and you don't agree on anything, Taylor192 has you on the housing arguement, if I need to prove you wrong I will gladly do it, providing real world examples. (Listings on MLS VS identical rental properties).

Also, FYI, 5/30 mortgage is dead, expect an anouncement before the end of the month where Mr. Flaherty outlines that the new minimum is 10% down and a maximum 25 year amoritization. Also consider that even though the BOC has not increase its lending rate, mortgage rates have increased in the last few weeks, CMHC is also nearly maxed out at it's 600 bilion dollar cap...

Oh and on the budget... well... typical BC, can't balance a budget, not industry friendly (See our discussion on the Northern Gateway Pipeline...)

I don't think our opinions were actually that far apart in the pipeline discussion and we agreed on some points, quite shocking considering our biases. I digress though.

I will in no way disagree, it's possible to rent an apartment for significantly less than owning in certain markets. Vancouver and Richmond for example are not areas where it is beneficial to own property. That is not the case for areas further east of Vancouver, where emotional buying, as Taylor refers to it, has not been as prevalent.

Rental:
$1100 per month
2 bedroom - 2 bathroom
underground parking
SS appliances/nice kitchen
http://abbotsford.en.craigslist.ca/apa/2863224367.html

MLS listing:
$153,888 - rounding down to $150,000
2 bedroom - 2 bathroom
underground parking
facing quiet side of building
could use minor updating
REALTOR.ca -Property Details F1123792

Overall, I would consider these two units comparable. The rental unit is a little more per month, but also is slightly nicer.

Cost of renting:
Rent- $1100/month
Total - $1100/month

Cost of ownership:
Mortgage- $738/month (10% down, 25 year amortization, 5% rate)
Condo fees - $150/month (Estimate based on Abbotsford averages)
Property Taxes - $100/month
Insurance - $25/month
Total - $1013/month

$77/month difference between owning and renting.

Also, see Nightwalker's example.

So if I post some links I get to call you an ignorant idiot? Done:

Lifetime interprovincial migration in Canada: looking beyond short-run fluctuations. | HighBeam Business: Arrive Prepared

As above, if I do, do I get to call you an ignorant idiot and completely discredit all your posts? Done:

Kingston, ON is very similar to Abbotsford, BC in siize and ammenties.
Kingston average single detached house price: $272K (2012)
Abbotsford average single detached house price: $393K (2012)

You'll learn one day I don't make stuff up, I have facts and figures to back up everything I post.

I think this explains why we're on different pages. This is the ad I referenced on CFOX:

http://www.angelacalla.ca/blog_post?id=6506&title=5-places-you-can-live-for-$26-a-day

I haven't heard anything about Abbotsford mentioned in these radio ads, yet I do distinctly remember $200K figure (which is missing from her blog - arg). Thus why we're not on the same page - the areas listed will have properties closer to $200K, rather than the $150K you reference in Abbbotsford.

I dont drink or understand any of the pricing behind it aside from people bring booze back from AB because it's so much cheaper than BC due to the gov regulation here. So why do you think liquor prices will go up compared to other provinces if we get rid of the regulation?

I'd rather not be called an ignorant idiot at all, it's unnecessary in a discussion between two intelligent adults.

I'm not that stubborn, if the evidence is compelling enough I will admit you're right, unlike most people.

I've been to Kingston quite a few times and actually own property there (inherited), I think Abbotsford is a significantly more attractive place to live. Kingston is also much further from Toronto than Abbotsford is from Vancouver. Is the difference in the cities enough to justify a difference in housing values of 30%, that's a definite no.

I'm not quite convinced enough to say, you're right though Taylor.

Ontario and British Columbia are such a significant distance apart, I understand the basis behind a fundamental comparison of cities, but comparing two cities from such different areas doesn't seem quite right in my mind. There are so many mitigating factors not taken into consideration in that comparison, which is why I compared Abbotsford to Langley, but I also understand the issues with comparing two cities so close together.

I'm going to research factors that contribute to housing prices more in depth, will edit later.

That's pretty outrageous, a person who is earning $15 an hour cannot afford $1100 a month. After taxes, housing would eat up over 50% of the buyers income. Maybe a person with that income could just squeak by with housing costs that high if they don't own a vehicle, but they'd be house poor as fuck,

I agree with you, that chick is promoting predatory lending.

890 million in 2011 and projected 906 million in 2012 in net profit. So tell me where is this 900+ million going to come from now? The figures for expenses and profit are public and free for anyone to see. I believe its on there website.
You are correct in saying " While average wages at BC liquor stores remain high due to the union, the starting wages have dropped significantly.
". 10 years ago starting wage was around $21 per hour now its starting wage is between $13.50 and 14.50.


As for " So why do you think liquor prices will go up compared to other provinces if we get rid of the regulation? " Each type of establishment is given a certain discount ie. restaurant, private liquor store, wine store, pub all of them are different. So if it is privatized then the wine store wont receive 30% discount they may only get 10% and charged more for delivery and have more wine shops opening up to compete against. Which means there profit shrinks so to maintain there profit they raise the prices in there store and so will everyone else.

I urge people to look beyond they grump at the cash register at the store and look at the big picture and all the areas and people this will effect. Its not as simple and buying booze at the store from a gov worker to a private one. OH and that $900+ million profit from the government distributed booze that is gone where will that come from again?

No one gets discounts. Private liquor stores get a 16% discount on their inventory and thats it. Restaurants pay retail.

I'd rather not either, just I hate having my facts questioned when most know I research topics to death. Just cause I don't always include a link doesn't mean you can fluff it off :smug:

Cool.

I looked a little more into Abbotsford using PadMapper and MLS. It seems there is a huge price different between the centre and the edges. Towards the centre 2bd condos go for $200K, yet rents seem to get cheaper for condos - while on the edges there's lots of newer condos for $150K yet almost none to rent.

Weird.