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Vancouver Off-Topic / Current EventsThe off-topic forum for Vancouver, funnies, non-auto centered discussions, WORK SAFE. While the rules are more relaxed here, there are still rules. Please refer to sticky thread in this forum.
So basically, the reason why people can't have "affordable" housing is because of sense of entitlement that they can stay in Vancouver and still be affordable and have decent or livable size to raise a family.
For example, if BC Legislation passes a law "Only Canadian citizens are permitted to purchase real estate in BC" would that only make a positive effect? or will there be any negative effects?
The people who are leveraged heavily into their home/mortgage would arguably be as big a "crisis" as the unaffordabillity imo.
People who think their retirement is relying on an 800k house that drops to a 600k house? $200,000 is 10 years of life when youre 70. And a correction of 200k is being more than generous imo. You really think there will ever be a time where east side homes will be under a mill again?
Builders and developers who are working with slim margins to make a profit as is would be ruined
I think the market will slow, but prices..look around...
I was at Canada place today to go watch the fly over Canada and there were 200+ Asian tourists with their families taking pictures and selfies with the water/mountains in the absolute pissing rain. And you know what? The scenery and city looked absolutely fucking Gorgeous.
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Dank memes cant melt steel beams
You don't have to do it all at once. If you institute a plan with several smaller phases over a decade or more, you achieve the desired goal without shocking the market.
The people who are leveraged heavily into their home/mortgage would arguably be as big a "crisis" as the unaffordabillity imo.
People who think their retirement is relying on an 800k house that drops to a 600k house? $200,000 is 10 years of life when youre 70. And a correction of 200k is being more than generous imo. You really think there will ever be a time where east side homes will be under a mill again?
Builders and developers who are working with slim margins to make a profit as is would be ruined
I think the market will slow, but prices..look around...
I was at Canada place today to go watch the fly over Canada and there were 200+ Asian tourists with their families taking pictures and selfies with the water/mountains in the absolute pissing rain. And you know what? The scenery and city looked absolutely fucking Gorgeous.
markets move in cycle. vancouver has been on an up cycle for 15 years or so except the short term blip in 2008/2009 so i don't see why it cannot correct for 5+ years. there is no major economic catalyst like a booming LNG industry that will create huge employment in this province in the near term.
it's important not to let the recency bias blind you because there are a lot of other beautiful cities in this world that have experienced correction i.e. Seattle and san Francisco. and the fact your rhetorical question mentioned van east home price may never dip below the 1 mil mark again makes the contraian in me think it might actually be possible.
markets move in cycle. vancouver has been on an up cycle for 15 years or so except the short term blip in 2008/2009 so i don't see why it cannot correct for 5+ years. there is no major economic catalyst like a booming LNG industry that will create huge employment in this province in the near term.
it's important not to let the recency bias blind you because there are a lot of other beautiful cities in this world that have experienced correction i.e. Seattle and san Francisco. and the fact your rhetorical question mentioned van east home price may never dip below the 1 mil mark again makes the contraian in me think it might actually be possible.
Let's be real, even if it does dip and 'correct itself', it's still unaffordable. You really think it's going to drop what, 50%!?! Even if it dropped 60% which I bet I would win the lottery first, everyone would be trying to buy it, thus the bidding war begins.
Home owners right now would die before they sell there homes for 50% of what it's worth right now.
Raise mortgage rates so people won't touch a mortgage? Fcuk, the china will be buying houses in bulk with cash. Supply and demand will kick in, everyone will start bitching again.
Eventually the BOC will be forced to push interest rates up to mitigate the impact of inflation and/or to keep bond prices/yields in check. Housing at these prices is only affordable because of rock bottom interest rates, not long after rates start climbing, home prices will fall.
You can tell me I'm wrong, you can speculate all you want, but when people can't afford homes because the monthly payments are too high, the choice to buy is no longer their choice, they simply can't qualify for the mortgage they need.
Don't bother mentioning the HAM factor because crazy house prices are an issue all over Canada, Calgary isn't exactly the most affordable city on earth either.
Personally I'm terrified for the financial future of Canada, we have an impending retiree crisis, stagnant wages, sky high housing prices, high taxes, a leader who is so PC he makes Hilary Clinton seem offensive, and abundance of resources that simply may not be as valuable as people once thought.
I don't know why I come back to this thread over and over... it's like groundhogs days every page, xx people think housing will go up forever and that the rich Chinese will own the west coast in due time, xx people think that a crash is imminent, xx people get all wound up and start failing posts like anyone cares, xx people get butt hurt over fails, etc...
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Quote:
Originally Posted by jasonturbo
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Let's be real, even if it does dip and 'correct itself', it's still unaffordable. You really think it's going to drop what, 50%!?! Even if it dropped 60% which I bet I would win the lottery first, everyone would be trying to buy it, thus the bidding war begins.
During the downturn, the expectation of future is for it to continue to decline. Hence, purchased would be done based on necessity, rather than speculation. However, if you know a house costing 1M today would likely be 900k 6 month from now, would you still pay 1M today? no, you'd lowball the crap out of it.
During a downturn, the market tends to overcorrect, until it's beyond fundamental economic sense before bouncing back.
It can and it will collapse if fundamental doesn't support it. People in Taiwan were saying that price can't collapse too. They are now experiencing a decline (red hot areas like Taipei are experiencing double digits drops). Transactions are now fraction what it used to be, with prices slashed by 20%+ from asking to conclude sales.
During the downturn, the expectation of future is for it to continue to decline. Hence, purchased would be done based on necessity, rather than speculation. However, if you know a house costing 1M today would likely be 900k 6 month from now, would you still pay 1M today? no, you'd lowball the crap out of it.
During a downturn, the market tends to overcorrect, until it's beyond fundamental economic sense before bouncing back.
It can and it will collapse if fundamental doesn't support it. People in Taiwan were saying that price can't collapse too. They are now experiencing a decline (red hot areas like Taipei are experiencing double digits drops). Transactions are now fraction what it used to be, with prices slashed by 20%+ from asking to conclude sales.
Don't get me wrong, I'm in the same boat as everyone else here.
But realistically, how much do you think housing prices will drop when shit hits the fan? With the prices at what they are, if they drop 50%, like I said before it's still unaffordable. Mortgage rate high? Still unaffordable. Vancouver will never be affordable if you're looking for a house to raise a family. Rent or move somewhere else. There's nothing wrong with that.
Id love to see the market crashe hard and every house is at say $500k in Vancouver. It'll be Chinese New Year every day in Vancouver (not just Chinese, many other wealthy people from all places in the world but just using them as an example)
Calgary is very different. Like all of Alberta it relies heavily on o&g. Housing was retarded when it was booming, not so great anymore. I don't see the China flocking that way neither. I'm also from Alberta so I've seen the boom and what it does to the economy and housing market.
Crash or not, everyone is just going to complain about it
I decided it was time to move.... I can go to the UK (grandparents were born there) and USA is the preference but won't happen due to green card issues... Now I'm stuck because the wife said she doesn't want to live here, but also doesn't want to live anywhere else in Canada and knows we can't go to the USA but says UK is too far away for her
Women. Logic defies them.
This post has little to do with real estate (other than being the driving force behind my decision) but at least I'm not repeating everything everyone else has said lol
Personally I'm terrified for the financial future of Canada, we have an impending retiree crisis, stagnant wages, sky high housing prices, high taxes, a leader who is so PC he makes Hilary Clinton seem offensive, and abundance of resources that simply may not be as valuable as people once thought.
This is all I think about as well. In 5 years, will all current post secondary grads have well paying jobs they buried themselves in debt for? Will rent rise because investment property owners need to pay off their mortgages faster because the market went softer and / or rates went up?
When oil keeps sinking and more jobs are lost, what will Canada brag about to the world? Selfies and Nelly Furtado's rendition of the national anthem? I mean I read a couple of articles a while back that showed for every $1.00 the average Canadian earns, they spend $1.06. Then it went to $1.09. Does it mean $1.50 isn't too far? Also, BC now surpasses every other province for people who use payday loans.
I'm not trying to sound like a fearmonger but I legitimately wonder what path we are heading down. I'd absolutely hate to think we'd end up like the US circa 2008.
Don't get me wrong, I'm in the same boat as everyone else here.
But realistically, how much do you think housing prices will drop when shit hits the fan? With the prices at what they are, if they drop 50%, like I said before it's still unaffordable. Mortgage rate high? Still unaffordable. Vancouver will never be affordable if you're looking for a house to raise a family. Rent or move somewhere else. There's nothing wrong with that.
Id love to see the market crashe hard and every house is at say $500k in Vancouver. It'll be Chinese New Year every day in Vancouver (not just Chinese, many other wealthy people from all places in the world but just using them as an example)
Calgary is very different. Like all of Alberta it relies heavily on o&g. Housing was retarded when it was booming, not so great anymore. I don't see the China flocking that way neither. I'm also from Alberta so I've seen the boom and what it does to the economy and housing market.
Crash or not, everyone is just going to complain about it
It's all about a game called "the last fool". When there's still fools (both local and foreign speculators) in the market believing that price would continue to increase, the market would have the power of moving forward.
The problem or the "shit" is when there is no more fools or it becomes too expensive to bet.
Take Calgary as an example, they relied heavily on resources to bump up their RE. When resources collapsed, it didn't hit RE during the first few months as fools still believed the RE could move forward without resource industry.
IMO, look at pure transaction numbers (ignore the price). When the trend changes and buyers start to dry, that's when shit hits the fans.
The province's real estate board says it will look into a controversial tactic some agents are using to flip houses in Vancouver, first uncovered by the Globe and Mail.
In a practice known as 'shadow flipping,' some realtors are using a clause in real estate contracts known as an assignment clause that allows them to transfer the purchase of a property to another buyer, pocketing multiple commissions along the way. It's designed to protect the seller in case a buyer backs out, but some say it's being abused.
The original seller gets less than they could have. The ultimate buyer pays top dollar, and the only real beneficiaries are the agents themselves, who pocket a commission for each new transaction. Sometimes the house changes hands multiple times without the buyer or seller being aware of it.
Strictly speaking, the practice is legal, but many people say it shouldn`t be, including NDP MLA and housing critic David Eby. "They're then taking that property and selling it to the buyer they know will pay more and pocketing the difference," he told the CBC this week. "That, to my mind, is the definition of insider trading."
A crisis in Vancouver: The lifeblood of the city is leaving
GARY MASON
The Globe and Mail
Published Thursday, Feb. 11, 2016 4:20PM EST
Last updated Thursday, Feb. 11, 2016 4:21PM EST
There is a growing societal divide in Vancouver that is threatening its future.
The city is increasingly becoming an investor haven for the rich. Sure, there are some lucky souls, relatively middle-class people who got into the housing market before prices took off and who are now sitting on a gold mine. Most realize how fortunate they are, the lottery ticket they won.
And they have consciences when it comes to the plight of those who have no hope of buying a house of any description in the city.
By now, everyone has a fairly clear picture of what is taking place; the confluence of factors that have led to the moment at which we have arrived; the global influx of capital, largely from China; low interest rates, a low Canadian dollar – all of which has created a price ascension that is beyond most people’s comprehension.
For many young adults, however, the city increasingly represents a place of which they no longer can afford to be a part. Consequently, Vancouver faces an almost existential threat; what happens when the lifeblood of any community, those in their 20s and 30s, decide to leave?
Frustrated over the inability to find even a condo at prices their salaries can accommodate, many young people are saying goodbye. Leaders in the city’s nascent tech sector – the clean, futuristic industry upon which the city is building its economic hopes – are warning that it’s going to be nearly impossible to develop this business into anything meaningful unless the affordability question is addressed.
And if you detect a greater sense of urgency in Mayor Gregor Robertson’s words these days on the housing question, this is why.
Ryan Holmes, founder of Hootsuite, which is headquartered in Vancouver, wrote an op-ed piece recently decrying the dismal state of affairs. “Unaffordability is emptying Vancouver of one of its most valuable assets – young people who grew up in the city and who are invested in it.” He cited as evidence the fact that the city is shuttering many of its elementary schools because of a lack of numbers.
“Vancouver risks becoming an economic ghost town, a city with no viable economy – other than the service industry catering to wealthy residents and tourists,” Mr. Holmes wrote.
Another young tech-sector worker, Saeid Fard, wrote a blog post a while back titled: The Decline of Vancouver. It has been shared thousands of times since it first went up. In it, he, too, laments what he sees emerging. “We have two classes of society forming along a divide that is growingly difficult to cross,” he wrote.
Like Mr. Holmes, Mr. Fard cites the impact the present day reality is having on his field. Eventually as young talent ages and wants the kind of things most people want – a house and a family – many can’t afford to stay in Vancouver. In fact, many can’t afford a home outside the city, either. Consequently, recruiting talent to the city is easy; retaining it is not.
For many young people, the attendant discussion about what forces are responsible for the market madness is irrelevant; all noise. They just know they are the ones dealing with the fallout.
Frankly, I’m not sure many people care about the young and their housing worries. They can find a cheap condo somewhere out in the burbs; start where everyone else starts. That is not an altogether unreasonable response. But think about the implications. A Vancouver that doesn’t have room for young people will quickly become a massive old folks’ home.
There are already enough houses and condos in the city with no lights on because no one actually lives in them. They are investments owned by someone halfway around the world who doesn’t really care about what is going on in the city as long as there is someone to valet his car when he arrives for his two-week stay.
I worry that some people don’t fully understand the danger at hand. Resentment is on the rise; frustration is widespread and palpable. Mr. Robertson knows that if something isn’t done soon to address the growing bitterness and antipathy, his city is not going to be nearly as attractive a place to live as it once was. In fact, in many ways it already isn’t.
It's all about a game called "the last fool". When there's still fools (both local and foreign speculators) in the market believing that price would continue to increase, the market would have the power of moving forward.
The problem or the "shit" is when there is no more fools or it becomes too expensive to bet.
Take Calgary as an example, they relied heavily on resources to bump up their RE. When resources collapsed, it didn't hit RE during the first few months as fools still believed the RE could move forward without resource industry.
IMO, look at pure transaction numbers (ignore the price). When the trend changes and buyers start to dry, that's when shit hits the fans.
I agree with some of your points, but if anyone thinks a vancouver house will ever be "affordable" is the only fool.
Vancouver hasn't relied on any resources like Alberta, yet the RE market has
Boomed like crazy. What makes you think it'll ever collapse? Also, what exactly is collapse?
Here's what I personally think. Also note I'm no expert in RE.
- Vancouver will always be a renters market.
- even if housing dropped by 50%, it's still unaffordable (houses)
- mortgage rate hike will not affect the Chinese or any immigrants when they purchase cash
- doesn't help that low Canadian dollar actually makes Vancouver more desirable to immigrants. They'll easily pick Canada over the states just because of the worth of there dollar
- the majority of people will not up and leave BC because it's unaffordable. Do you know how hard of a decision that is for people that don't have degrees, have families, significant others?
In the end, I don't know what's going to happen. It could crash hard, prices could double again. Who knows, but if you're waiting to buy a house in Vancouver to raise a family but can't afford the $1mil+, have fun waiting.
I agree with some of your points, but if anyone thinks a vancouver house will ever be "affordable" is the only fool.
Vancouver hasn't relied on any resources like Alberta, yet the RE market has
Boomed like crazy. What makes you think it'll ever collapse? Also, what exactly is collapse?
Here's what I personally think. Also note I'm no expert in RE.
- Vancouver will always be a renters market.
- even if housing dropped by 50%, it's still unaffordable (houses)
- mortgage rate hike will not affect the Chinese or any immigrants when they purchase cash
- doesn't help that low Canadian dollar actually makes Vancouver more desirable to immigrants. They'll easily pick Canada over the states just because of the worth of there dollar
- the majority of people will not up and leave BC because it's unaffordable. Do you know how hard of a decision that is for people that don't have degrees, have families, significant others?
In the end, I don't know what's going to happen. It could crash hard, prices could double again. Who knows, but if you're waiting to buy a house in Vancouver to raise a family but can't afford the $1mil+, have fun waiting.
a little over 10 years ago, Vancouver was very affordable. Vancouver has not always been a renters market, and outside of our current situation, there is nothing to say it will continue to be so into the long term future (if it were, then people would only ever buy based on speculation of increasing prices - that's just crazy, nothing goes up forever when it generates negative earnings.
whilst there are many factors in play today in Vancouver, there is a global phenomenon whereby real estate has become a commodity. you see it all over the world. housing will become way more volatile due to its semi-commodity nature.
QE has created increased volatility in the equities market - this is the consequence of central banks doing something new. Central banks had no problems entering QE, and whilst QE had a desired effect (stop the rot), it has not been effective at all. Exiting QE, low rates, etc. is extremely difficult and it is known that no one really knows what will happen as we exit, or how we will exit this current situation.
my point is, don't discount future affordability in Vancouver, which could be brought by something in China, a change in regulation within BC/Canada, new tax rules, or changes to mortgage rates.
We are living in a more and more volatile world, and I know i've banged on and on about it, but this is why diversification and fiscal prudence is of utmost importance - if you can ride through the downs, you will be there to prosper through the ups.
we hear all this stuff about abuse of the capital gains exemption, this just shows the ineptitude of the CRA.
i'd love to see some kind of long term / short term differential in tax rates, just as the US has on capital gains (if you own a stock for <1 year and sell, you pay full tax, if owned >1 year, you pay basically half the rate).
so much could be done to keep the spirit of the capital gains exemption for those truly residing in their principal residence (people live in a house for avg. 7 or so years, so you could easily make it work to keep 95+% of people in a tax exempt position).
I'm all for a free market, but when it is clear that some are unfairly not paying their fair share of tax, then the government owes their residents and citizens a duty of care to address this. The strength and quality of your government can be assessed in how they address such issues... i will not hold my breath on this one!
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Quote:
Originally Posted by jasonturbo
Eventually the BOC will be forced to push interest rates up to mitigate the impact of inflation and/or to keep bond prices/yields in check. Housing at these prices is only affordable because of rock bottom interest rates, not long after rates start climbing, home prices will fall.
the other day in the news it was suggested, once again, that the BoC will go to negative interest rates, like several other countries, where banks will be charged for holding onto money (forcing them to spend)
the other day in the news it was suggested, once again, that the BoC will go to negative interest rates, like several other countries, where banks will be charged for holding onto money (forcing them to spend)
just to clarify, central banks charging negative rates and end users being charged negative rates are entirely different things.
The ECB has introduced negative rates, but i still have 0.9% in my savings account (which is crazily high). The move is more to force banks to lend (multiplier effect of businesses borrowing cheaply and investing in producing assets, hiring people, etc.), not hold deposits, this is not a push consumers to blow money on the latest iphone
thinking about how this will effect mortgage rates, I would suggest two considerations:
1) if the US market doesn't go negative, and 5 year bonds inch up, the canadian mortgage market will likely not go down for fixed rate mortgages.
2) for variable rate mortgages, the margin banks charge may go up as bank deposits will be costing them, they must make it up elsewhere.
there are many forces at play in the world of money supply, so it is never as simple as this, but i would not expect rates to go down in perpetuity, and if they were to do so, i'd be more worried about my job because it's an indication of a horribly sick economy.
low / negative rates are not good news, we should not celebrate them.
Eventually the BOC will be forced to push interest rates up to mitigate the impact of inflation and/or to keep bond prices/yields in check. Housing at these prices is only affordable because of rock bottom interest rates, not long after rates start climbing, home prices will fall.
You can tell me I'm wrong, you can speculate all you want, but when people can't afford homes because the monthly payments are too high, the choice to buy is no longer their choice, they simply can't qualify for the mortgage they need.
I don't know and don't really care about the detached housing market in the near suburbs, but I do know that people are paying cash for townhouses in the Tri-Cities. People are buying them without subjects which is crazy.
Every open house I attend there's probably 20-30 people in there at any one time. Many families - whether they be Asian, Indian Ismali, or white. Financing is largely irrelevant for these people - even if financing is required, these people likely have several hundred thousand accessible for down payments.
Notwithstanding the generation-X white people I'm seeing at open houses, the children of immigrants tend to be marginally successful white collar professionals (accountants, business analysts, health care professionals, teachers, engineers) with good credit, so a mortgage that is a half-million is not that hard to obtain. These jobs tend to withstand challenges to the economy (after all, even the provincial government had to cave in in its recent negotiations with the teachers union, for example). And immigrant families tend to not let children drown, so even if they lose their job, the families will pitch in and keep them afloat. It may be an affront to North American, pull-up-by-the-bootstrap values, but this is how it works in Asian, south Asian, and southern European cultures (e.g. Italian). How often do you hear about an Asian family filing for bankruptcy?
Take this with a grain of salt, but when I talk to realtors about what things are selling for right now, they're selling for 10-20% above asking.
Quote:
Originally Posted by jasonturbo
Personally I'm terrified for the financial future of Canada, we have an impending retiree crisis, stagnant wages, sky high housing prices, high taxes, a leader who is so PC he makes Hilary Clinton seem offensive, and abundance of resources that simply may not be as valuable as people once thought.
The retiree crisis has been talked about for over a decade. Boomers aren't leaving their jobs because they either like to work, they can't afford to retire after losing their skin during the crash of 2008, or they're bankrolling down payments for their kids. The only boomers I know who are retiring are those in public sector organizations where they have defined benefit pensions. And even those people are coming back to work for the same organizations they left because they can come back as consultants and double-dip.
Stagnant wages are real, but I would argue it's largely because shareholders are demanding growth at all costs. We're largely to blame because we expect as much when we're managing our own portfolios. Plus, we're demanding lower prices, shopping on Amazon, etc.
Taxes are high because we have a costly legacy program - health care. Lots of people have health conditions they can't help/prevent, but there are many more people who have neglected their health over the years. The system is good at delaying death, but it is not good at prevention. The Lower Mainland is an anomaly, but if you go anywhere else in Canada, you've got major issues. Alcoholism, weight control/obesity, type 2 diabetes, etc. But, it's politically difficult to call people out on their lifestyles.
Quote:
Originally Posted by jasonturbo
I don't know why I come back to this thread over and over... it's like groundhogs days every page, xx people think housing will go up forever and that the rich Chinese will own the west coast in due time, xx people think that a crash is imminent, xx people get all wound up and start failing posts like anyone cares, xx people get butt hurt over fails, etc...
I personally come back because you do get posts like yours that do add value to the conversation.
Not sure why everyone is going off about capital gains. IIRC it only applies to the first million.
Quote:
Originally Posted by 4444
we hear all this stuff about abuse of the capital gains exemption, this just shows the ineptitude of the CRA.
i'd love to see some kind of long term / short term differential in tax rates, just as the US has on capital gains (if you own a stock for <1 year and sell, you pay full tax, if owned >1 year, you pay basically half the rate).
so much could be done to keep the spirit of the capital gains exemption for those truly residing in their principal residence (people live in a house for avg. 7 or so years, so you could easily make it work to keep 95+% of people in a tax exempt position).
I'm all for a free market, but when it is clear that some are unfairly not paying their fair share of tax, then the government owes their residents and citizens a duty of care to address this. The strength and quality of your government can be assessed in how they address such issues... i will not hold my breath on this one!
Taxes are high because we have a costly legacy program - health care. Lots of people have health conditions they can't help/prevent, but there are many more people who have neglected their health over the years. The system is good at delaying death, but it is not good at prevention. The Lower Mainland is an anomaly, but if you go anywhere else in Canada, you've got major issues. Alcoholism, weight control/obesity, type 2 diabetes, etc. But, it's politically difficult to call people out on their lifestyles.
We do have government overspending on something ridiculous.
Just as an example, we need to get rid of Senators of Canada. They exist in Canada but serve no purpose. For millions of tax dollar spent on something like this, we'd better off investing money to booting our economy.
Government does spend significant amount of money on something redundant.
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