Vancouver's Real Estate Market

[SumAznGuy]

Originally Posted by Timpo

I know I'm missing something, but it may not be all bad thing?

It's a balancing act. If minimum wage goes up to say $15 like how everyone wanted it to.
Then the price of a happy goes to up $10 for the sake of argument.

Like the RE prices, your actual income hasn't gone up, so your buying power has decreased.

Cars is one of those items you don't buy on a regular basis so the impact of that is less.
But food, gas, general merchandise that people use on a daily basis goes up.

[Drow]

Originally Posted by 4444

sorry to be so stupid, but are we saying banks issue mortgages without home inspections?!

i'm shocked by this... are the banks really that dumb?

95% of the mortgages i do for my clients have an appraisal requirement. Of course, the appraisal report can only tell you so much, especially if it's a detached. The report will show the market value of the property, or any adverse risks which may impact the marketability of the property. They'll also comment on the overall condition of it as well.

Small details or structural damage of the property are not detected by appraisers.

[unit]

this is ontario not bc, but here the problem is even worse.
the gov has never over time, raised wages to beat inflation.
btw, you wouldn't even want to look at that graph with detached housing or semi detached added in...

[SumAznGuy]

Originally Posted by winson604

All I can say is don't let the emotions get the best of you.

I'm not. I'm just making fun of the situation.
A family friend was looking for a house back in 2012. His wife was preggers and they knew they needed a bigger place for the growing family.
Took them 15 months to find the right place because everything that was good was being bid up.

[Timpo]

Originally Posted by SumAznGuy

It's a balancing act. If minimum wage goes up to say $15 like how everyone wanted it to.
Then the price of a happy goes to up $10 for the sake of argument.

Like the RE prices, your actual income hasn't gone up, so your buying power has decreased.

Cars is one of those items you don't buy on a regular basis so the impact of that is less.
But food, gas, general merchandise that people use on a daily basis goes up.

Depending on how you look at it.

Many people buy cars on loan. Also insurance, maintenance, etc...all add up to "daily living cost"
Same as real estate, mortgage is pretty much daily living cost just like grocery.

[winson604]

Originally Posted by SumAznGuy

I'm not. I'm just making fun of the situation.
A family friend was looking for a house back in 2012. His wife was preggers and they knew they needed a bigger place for the growing family.
Took them 15 months to find the right place because everything that was good was being bid up.

Oh no I wasn't referring to you but just some people in general. I and I'm sure everyone knows at least 1 person who bought a place purely off of emotion only to come regret it later, not always but it happens. This is in fact the biggest purchase of your life for most people and emotion is the last thing to count on in making a rational decision. Best of luck to everyone still looking!

[jackmeister]

I'm not sure if you guys have applied for a mortgage recently but this is the jist of it:

1) T4 and Notice of Assessment for last 3 years
2) personal financial statement (for some banks only)
3) Company financials if you are self employed

Offshore money is 1 thing, but I think a major catalyst is the low interest rate environment + slumping economy. Banks are lending like keeping money is dirty.

Recently my mother and I invested in a property. The purchase was funded by a mortgage and the down payment was funded by a line of credit secured with our home. We didn't take out any money and I suspect its the same for a lot of people. We just pay a small amount every month but the monthly appreciation is definitely way above the payments.

[winson604]

^^
Similar to what I did quite some time ago except also needed something from the company confirming employment and for how long.

[sdubfid]

Originally Posted by 4444

if people are buying with no subjects (ignoring those who will tear down), doesn't that just scream danger?

As you rightly point out, it's all emotion, and given I look at everything from a financial point of view, I'd never buy when those around are buying with emotion, as everything detaches when emotion is involved!

Every house purchase and sale I have been through has been with inspections and certain subjects, you'd be crazy not to.

can you even get a mortgage without an inspection these days (surely the banks would have to, no?)?

I do this myself and need to remind myself to put things in perspective. I know I'm not the only one as there are people in the craigslist good buys thread that will not consider a car if it has capital letters in the title even if it is in fact a good buy relative to others.

I know multiple people that have bought condos in the last few years on emotion. They spend more time figuring out where to save 5cents per litre on gas than worrying about getting $300000 in debt.

On a side note for anyone looking for extra help paying the mortgage living in a condo: get blue bags from the return-it depot and take the recyclables from your condo recycling area. Bring them to the new automated return-it depots and they credit you with cash or gift certificates. No sorting required.

[Digitalis]

Hey Timpo I heard they upped the minimum wage in Seattle you should go there and try to get a job give yourself a nice big raise. With exchange the way it is.. thats like 20$/h cad!

Originally Posted by Timpo

wait...I have a question.

I know we all think that Chinese investors raising housing prices is a bad thing, because our living cost in BC is ridiculously high now.

Gas prices, mortgage prices, labour cost for mechanics, carpenters, anything and everything... all gone up..

But is this a bad thing?

If our living cost goes up, inevitably government would have to raise the minimum wage.

OK so here's an example:
Say BC government announce that minimum wage is now $30/hr due to housing prices, blah blah blah.
Which means, grocery prices will go up because of labour, and all the other things in stores might go up too.
BUT!
What about cars and houses?
Cars that are made in Japan, USA, Germany, etc...will be whole a lot cheaper. (Sure, it will go up due to dealership people getting higher wage) but the cost of goods for car itself will be a lot lower relative to how much money people are making.
This can be said for anything made overseas. Which is majority of what we buy (how many "Made in Canada" products do you see everyday anyways)

I know I'm missing something, but it may not be all bad thing?

[Tapioca]

Home equity financing is pretty common here. So is money from overseas. So are gifted down payments from parents. I don't know... I know the North American way is to let children fend for themselves, but most other cultures will do whatever it takes to ensure their children enjoy success in life. This is the reality in Vancouver - kids taking their parents to open houses, etc.

Sure, it's a house of cards, but even if it crashes and home values fall 50%, there are hordes of people who have been waiting on the sidelines with several hundred thousand in cash who are waiting to get in. And people from other parts of Canada who cannot work in another country, etc. who would love to retire/semi-retire in BC. Why wouldn't you if you could afford it?

It's easy to look at this market from afar and think everyone is insane. If the market crashes, sure, the taxpayer is on the hook because of CHMC insurance. But, the number of theoretical defaults would be a relatively small portion of the overall public budget. Canada is a socialist country and the people who have created these programs are not stupid, though some people are quick to judge. Certain parts of the media will no doubt exaggerate the extent of the damage and people who have bought into Garth Turner's rhetoric will have a field day. Most home owners, however, will shrug their shoulders and continue the grind of taking kids to soccer practice, commuting to their jobs, etc.

[quasi]

Originally Posted by Tapioca

Home equity financing is pretty common here. So is money from overseas. So are gifted down payments from parents. I don't know... I know the North American way is to let children fend for themselves, but most other cultures will do whatever it takes to ensure their children enjoy success in life. This is the reality in Vancouver - kids taking their parents to open houses, etc.

My kid can rent until my wife and I die then he can have our house which is way more then either of our parents will leave us.

I obviously want my kid to succeed but I can't buy him a house or even give him a huge down payment that's just not in the cards. I'll help him with his post secondary as much as I can, if possible I'll pay for all of it.

[Traum]

Originally Posted by quasi

My kid can rent until my wife and I die then he can have our house which is way more then either of our parents will leave us.

I obviously want my kid to succeed but I can't buy him a house or even give him a huge down payment that's just not in the cards. I'll help him with his post secondary as much as I can, if possible I'll pay for all of it.

My understanding of what Tapioca is saying is -- if you can afford to help you your kid with either laying a huge down payment down for him, or buy him a house, is that something you would do?

Many people from different cultures (in Vancouver) are doing exactly that. My parents did the same by helping me cover ~1/2 of the down payment for the condo that I'm living in right now, and I am both grateful for their help, and not ashamed to acknowledge that I received this help.

When it is my turn to support my kid(s), I will definitely do everything I can to help them with a down payment too. But for me at least, buying them a house outright -- even if I could afford it -- is a big no no. That would be too easy for them, and I want them to understand first hand the responsibility to fend for themselves.

[G]

Sorry, if this is the wrong place, but I just want to hear everyone's thoughts on the Brentwood area and the slowly increasing density that's happening/about to happen.

[Traum]

Originally Posted by G

Sorry, if this is the wrong place, but I just want to hear everyone's thoughts on the Brentwood area and the slowly increasing density that's happening/about to happen.

IMO, unless you are a dedicated public transit user, I would stay away from there at all costs. With all the density that is already there in the area (and more that is coming up), I can't imagine how horrible the (vehicle) traffic is gonna be.

[quasi]

Originally Posted by Traum

My understanding of what Tapioca is saying is -- if you can afford to help you your kid with either laying a huge down payment down for him, or buy him a house, is that something you would do?

Many people from different cultures (in Vancouver) are doing exactly that. My parents did the same by helping me cover ~1/2 of the down payment for the condo that I'm living in right now, and I am both grateful for their help, and not ashamed to acknowledge that I received this help.

When it is my turn to support my kid(s), I will definitely do everything I can to help them with a down payment too. But for me at least, buying them a house outright -- even if I could afford it -- is a big no no. That would be too easy for them, and I want them to understand first hand the responsibility to fend for themselves.

If I had the money I suppose I would help where I could as far as housing but I doubt I'll have that much excess cash available. I won't go into debt to help my kid buy a house but I would go into debt to pay for his education, I don't know that might sound messed up but that's how I feel about it. The education thing will be a mute point anyway as my son fully expects to be playing for a NCAA school on a full ride scholarship just ask him. Who am I to tell him any different? Dream big kid.

[Tapioca]

Originally Posted by G

Sorry, if this is the wrong place, but I just want to hear everyone's thoughts on the Brentwood area and the slowly increasing density that's happening/about to happen.

Lived in the area for 8 years. The City of Burnaby has big plans for the area - lots of towers and low-rises are going up. If you're single, or a newly-married couple just starting out, it's a decent place to be. I feel that with Solo coming online (with Whole Foods as its anchor tenant), the area is finally starting to turn the corner. It's been half-baked for many years, but Dawson will be all rezoned in the next 5-10 years.

Traffic is getting bad, but if you're single and work downtown, who cares? Take the train to work, or bike. If you need to get out of the city, the highway is right there. The buildings have their fair share of drug dealers and ne'er do wells, but I feel that at current prices, it's mainly Asians that are moving in. However, it isn't as saturated as Metrotown, which means the buildings are still managed by diligent councils, as opposed to cheapskates.

There is 1 building you want to avoid if you're looking to buy used. Currently, the owners are on the hook for new windows, despite the building being 10 years old.

[winson604]

Originally Posted by G

Sorry, if this is the wrong place, but I just want to hear everyone's thoughts on the Brentwood area and the slowly increasing density that's happening/about to happen.

Depends what you're seeking? I could say Strathcona is a fabulous hood but only if it fits your bill.

With that said it's booming and got quite a few things within walking distance i.e. Whole Foods, Save On, Liqour Store, Joeys, Cactus, BP, soon to be redone mall. Close to transit so great if you do that. Traffic if you drive? Well depends where you work I guess, if you're close to downtown or need to head West others have mentioned it sucks but while it's nice to be close to work that isn't always realistic so don't make that the be all end all. List goes on for both good and bad but depends on the person.

[Nlkko]

Originally Posted by 4444

wild wild west of real estate back financing.

but completely different to US circa 2001-2007, totally different... well it kinda is, canadian tax payers will pick up the pieces of this one

Wow.... And that doesn't scare people... Amazing, and sad.

[Mr.HappySilp]

Originally Posted by sdubfid

I hope you didn't pay for dinner! What else did they say? Do they choose the ugliest one so they can drive the bulldozer through it?

Nah I didn't pay. One of the guy there put the bill on his company account. My Chinese isn't that great but from what I could understand and see is that they have this wechat groups with agents updating pics, price and location of housing in Vancouver and who wants to buy it just contact the agent. I am really sure how payment works or how much commission is made. My guess is that the agent in China must be working some real estate agent or agency here.

[noclue]

this 50% drop will never happen due to people waiting in the sidelines cash ready rhetoric is nonsense.

If it drops that much the economy is in the shitter either you'll be unemployed or it'll be downright impossible to get a mortgage.

Unless of course, everyone is such a diligent saver and have 1M+ cash ready.

[thebrownboy]

People just need to wait to buy. I honestly cannot understand people who are purchasing property right now. I was about to be a first time buyer (I'm 23) but I decided to rent instead and use the money I would've used as a down payment to invest (same return that owning a house would give me).

Honestly I believe that this is all just a matter of time. When enough of Vancouver becomes foreign homes owners or uber rich CEO's and retired people, then we will see the effects and changes start to happen. (hopefully within 5-10 years). When no one is left in Vancouver to work and people decide that it isn't worth it commute an hour each way (work locally instead) then companies will have no choice but to start moving.

How many 25 year old adults can honestly afford a house/condo in Vancouver? They will be, more than likely, just fresh out of Post Secondary and/or already working a job in their field which means they'll still have student loans or won't be making much because they would still be new at their jobs. When my parents generation gets closer and closer to retirement and suddenly there's a shortage of workers in Vancouver, especially trades and technical work, then there will finally start to be some sort of Government intervention. Without it, Vancouver will be headed downhill real fast.

TLDR; it's a sellers market, not a buyers so stop trying to buy. Rent. Take the money you would use for a down payment and invest in a high yield/return bond or stock of some sort (talk to a financial advisor, you'd be surprised at the returns that are possible). Or if you must feel the need to buy, move away from Vancouver.

[Ludepower]

Congrats for the people who got in.
I'll keep renting stress free until something gives.

[fliptuner]

Originally Posted by Ludepower

I'll keep renting stress free until something gives.

What the above posts are saying is that, when something "gives" there are really only 2 scenarios:

1. The economy is completely fucked and no one can afford to buy.

2. Let's say for the sake of argument, the gov't doesn't allow foreign investment and all the mainlanders cash out. There will still be thousands upon thousands of local people that have cash on hand that can still buy, which really means the market still flows at the same rate or higher.

My point is, for the foreseeable future, the market isn't going to slow down.

[Hondaracer]

"Wait to buy"

Two of my best friends ground out a life in Alberta for the past 5 years, could have bought a house where they wanted 2 years ago and actually been able to afford it.

Same houses right now are 250k+ more than at that time, they lost all their buying power and now have to stay working in Alberta. You think those houses are going to lose that 250k in the next 5? Highly doubtful.

"Wait to buy"

I will say though, personally it is going to be fucking suhweeeeeeet if the crash ever does come. Man what a house I will have lol