[jasonturbo]

Source: http://www.greaterfool.ca/2011/02/16/2020-2/

http://www.youtube.com/watch?v=GACrYXDYEsw




http://www.youtube.com/watch?v=GACrYXDYEsw

"Well, this was predictable.

Days ago I reprinted a Craigslist ad offering to pay people to line up outside the sales office of a new condo development in Burnaby. “We need people to hold spots and line up for a new condo project located in Burnaby (Kingsway/Willingdon Ave),” it said. “Line up may start as early as weds/thurs night. Grand opening is Saturday February 19, 2011. Warm beverages and washrooms will be provided by the developer. Shifts are determined on how long you would like to stay. (preferably 8 hours+) Get paid cash quickly for sitting in a line up!”

This, of course, is reprehensible. False advertising, meant to misled people and create an untruthful situation. Until, of course, illusion becomes reality. That apparently happened last night when a TV crew from Global showed up, and footage hit the air of anxious buyers ready to mob the latest dream building. By Saturday morning this charade may actually have created demand in Canada’s most delusional market.

Jen works nearby. This is her report:

“When I went to work Tuesday morning I noticed a bunch of people at the empty lot and wondered what was up. Through the morning, the crowd/lineup grew. At noon, I noticed the porta-potty in a parking lot behind an adjacent building. An hour later it was gone (I kinda wonder if we should call the employment standards people – after all, I think it was in the job offer). The line grew by 50% from what was there at 9:30, so at 2:45 when I left, the lineup stretched beyond the length of the adjacent building. By 4, they were erecting tents (like very nice party tents - fully enclosed) for the people in the lineup exposed to the rain. When I went back to work at 8 there were flood lights for the people now in the tents. And alas, when I left at 10, the floodlights were extinguished, but several police cruisers were in attendance

“A co-worker went out and spoke to the people in the lineup at lunch. When asked what they were in the lineup for, the first two people in line didn’t know. A little further down the line, someone said they were waiting to buy a condo. When asked if one of them were going to buy a condo, the guy said no, but his friend beside him was going to buy one. Asked if they were getting paid to stand in line….answer…no! Upon leaving the project with a loud comment from my co-worker “hope you guys are getting paid well for this”, the answer from one “not bad, not bad”.

“I’m horrified and can’t believe that we live in such a society. But from 15 floors across the road, it’s very entertaining! And…there is the possibility of snow on Thursday night or Friday! I think I might try to sell coffee at an inflated price.”

Okay, same Bat Channel, different Bat City. In Toronto another blog dog reports on a mortgage just handed to his friend by one of the country’s Big Five chartered banks. You know the ones – the global leaders in responsible lending, guardians of an impeccable financial system that would never, ever allow the kind of deadbeat McMansions-for-Oakies loans that lead to the seminal collapse of the US housing market.

Or not.

“My colleague just got a loan approved for $400,000 from one of the top 5 banks. He has s 5 % downpayment (around 20,000). He’s not even on a company payroll but on a contract. No real job prior to joining our company. Wife is in a retail job of $12 an hour. Above all: will complete 2 years in the country in Sep 2011. What the lending standards the bank has followed here I fail to understand.”

No steady job. No employment security. Minimal downpayment. Uncertain credit history. And yet rubber stamped for 95% financing. At teaser rates destined to reset far higher. How, exactly, is this different from the sub-prime mentality which facilitated the demise of real estate to the south?

Well, one difference is that in the States these days they’re far more conservative than we crazed beavs.

While Ottawa endorses and supports home purchases with just 5% down, the Obama administration is calling for minimum downpayments to be 10% before qualifying for mortgage insurance.

http://www.greaterfool.ca/wp-content/uploads/2011/02/DOWN.jpg

But that hardly matters. In nine of the biggest American cities the average down on a house is now 22% – a number which has doubled in the last three years. This is also three times the average downpayment in Canada right now, which CMHC estimates is running at just 7%.

And who’s driving this trend towards more prudent lending standards? Here’s how the Wall Street Journal put it:

“The move to force home buyers to lay out more cash is driven mostly by banks, who have found that larger down payments discourage delinquencies by increasing the buyers’ exposure to loss and reducing the impact of declining prices. Many home buyers placed little, if anything, down during the boom.”

It’s also interesting to note while buyers here can get 100% financing, and purchase houses with zero money – thanks to those cash-back mortgages at some of our big, conservative, prudent banks – this is impossible in the US. The only exceptions are for military veterans or rural residents, where government programs allow for no equity. In Canada you just need to be a bank customer, and fog a mirror.

The point of this post, therefore, is to be fooled not by illusion.

The condomaniacs you see lining up, desperate to grab an imaginary unit in an unbuilt building, may be as phoney as the developer’s moral compass. The buyers of houses selling for near half a million may be two paycheques from oblivion. And the bankers in towers of granite and gold may give us our own Madoff moment."

I am basically posting this as a response to the "Realtors of Mainland Chinese Using Helicopters to Buy!" Which IMO was another attempt on behalf of the media to hype real estate.

I can't help but point this sort of thing out, everyone is always so quick to believe what the media feeds them, it's a shame that advetising dollars trumps ethics. Both of these news bits were on Global and less than a week apart.

Thoughts anyone?

EDIT** http://vreaa.wordpress.com/2011/02/17/burnaby-condo-presale-lineup-more-shameless-re-promotion-presented-as-news-by-global-tv-and-cbc/

Sounds like some other people figured out this was a setup.

[Gnomes]

I want this scandal exposed more and more. Shame on them for screwing with people's mind.

[jasonturbo]

I want this scandal exposed more and more. Shame on them for screwing with people's mind.

Well what's worse...

-Media not following a fairly basic code of eithics?
-Real estate promoting false consumer sentiment? (And they call themselves professionals/advisors???)
-Consumers not taking the time to educate themselves

[StylinRed]

So that's what i saw.... i was wondering what the fuck those morons were doing even asked in rs chat about it; if it wasn't for the global story though you'd have no idea why they were outside

[Vansterdam]

reminds me of this thing i read in the 50 laws of power

[drunkrussian]

i dont see anything unethical about creating a buzz for your product with employees - companies that make all your favorite products do it all the time for pr. if that makes u buy ur problem. its capitalism man. as for banks pulling shit, i do agree they have some responsibility. ane consumers need to be less retarded. but the realtors' job is to market and sell - absolutely nothing wrong with paying ppl to line up wtf
Posted via RS Mobile (http://www.revscene.net/forums/announcement.php?a=228)

[taylor192]

Well what's worse...

-Media not following a fairly basic code of eithics?
-Real estate promoting false consumer sentiment? (And they call themselves professionals/advisors???)
-Consumers not taking the time to educate themselves
Its only the biggest purchase of their life, right?

I see people put more effort into researching what shoes to buy. Sad statement about society.

[taylor192]

i dont see anything unethical about creating a buzz for your product with employees - companies that make all your favorite products do it all the time for pr. if that makes u buy ur problem. its capitalism man. as for banks pulling shit, i do agree they have some responsibility. ane consumers need to be less retarded. but the realtors' job is to market and sell - absolutely nothing wrong with paying ppl to line up wtf
Posted via RS Mobile (http://www.revscene.net/forums/announcement.php?a=228)
First, let me say Realtors don't pay people to line up, Developers do.

Second, CREA has an entire section on ethics, and that's why many choose a Realtor cause it is someone they can trust. Hell they run commercials stating this too. Yet Realtors pull similar stunts, thus the CREA ethics is just a bunch of BS.

[jasonturbo]

i dont see anything unethical about creating a buzz for your product with employees - companies that make all your favorite products do it all the time for pr. if that makes u buy ur problem. its capitalism man. as for banks pulling shit, i do agree they have some responsibility. ane consumers need to be less retarded. but the realtors' job is to market and sell - absolutely nothing wrong with paying ppl to line up wtf
Posted via RS Mobile (http://www.revscene.net/forums/announcement.php?a=228)

I agree with a lot of what you are saying with regards to the position of the realtors and developers. The consumer is responsible for their own actions, no one else.

What I don't agree with, is the media's role, most people believe media outlets like Global News maintain an impartial-third-party position on all matters ... where in this case, they are showing you what their paying customers want you to see.

The real story should be an expose on the financial relationship between a developer with a good marketing team, and an unethical media outlet. If my favorite news channel is using their income stream to determine my news about the condo market, then what else are they telling me that isn't accurate based on internal financial matters.

These people call themselves reporters and journalists... but they can't "figure out" people are being paid to stand in line hahaha. What a joke.

[taylor192]

My favourite local blog tracks sales and listings: http://vancouvercondo.info/

Feb is on pace to:
- crush every other Feb for the past decade for active listings
- below average sales at best
- 2nd lowest sales/list ratio in a decade

What does this mean?
- sales should be much higher considering the people that are supposedly rushing to beat the Mar 35-30yr amortization change
- either people are rushing to sell to beat the deadline OR the inventory taken off the market last year is being put back on since spring is the strongest market to sell. Wait for the listings in Mar after the deadline passes. If listings continue to grow at a ridiculous pace, then it is inventory that was taken off the market being put back on.
- this is the 6th month of bad numbers. Not terribly bad numbers, yet definitely not good numbers. There's been no improvement, so either we're heading to flat numbers for a long time, or the snowball is about to pickup momentum down the hill.

[True.True]

Im glad i listed my apartment last month rather than sep 2010. Was gonna list for 339k last year but waited til jan and listed for 349k and sold 6days later for 355k. :)
Posted via RS Mobile (http://www.revscene.net/forums/announcement.php?a=228)

[TouringTeg]

Im glad i listed my apartment last month rather than sep 2010. Was gonna list for 339k last year but waited til jan and listed for 349k and sold 6days later for 355k. :)
Posted via RS Mobile (http://www.revscene.net/forums/announcement.php?a=228)


Nice! I am definitely torn on whether or not to list mine right now or wait until the spring. I feel like there should be more people right now jumping on low interest rates and avoiding the 35 to 30 amortization period rule change.

Like Taylor said it is not happening. I am watching the condo market in Victoria and sales are very slow.

Looks like people have contacted Global. It will be interesting to see if they do a follow up on the story... I won't hold my breath

[jasonturbo]

Nice! I am definitely torn on whether or not to list mine right now or wait until the spring. I feel like there should be more people right now jumping on low interest rates and avoiding the 35 to 30 amortization period rule change.

Like Taylor said it is not happening. I am watching the condo market in Victoria and sales are very slow.


You might as well list it now, if it takes 2 weeks or 6 months to sell it doesnt affect what you pay the realtor.

Sure people will tell you number of days on the market is a neg. factor in selling a property but that's realtor talk for "drop the price so it will sell and I get my commision" After all, if you sell for 5% less than asking, it barely affects what the realtor makes, and consider the more propertys they sell the better, so their best interest is quantity (7% on first 100k, 3% there after is common). If you're asking 20k too much and they show your house 100 times the ratio of time invested showing house to profit is a not nearly as good if they get you to settle on a lower price and the house sells for 20k less and it only takes 5 showings etc.

With typical commision, the difference between 520k and 480k (Lets say market value is 500k) is only 2000$ in commision roughly, so take that another step further and figure that bewteen the brokerage, the other realtor (the buyers realtor), you are only really going to see 1/3rd of the overall commision. So if you get 40k less for a house, you as the realtor only lose 666$. Imagine how much faster a house sells when it's 40k less than comparables,... pretty quick.

Another reason why realtors "can be" scumbags.

** Feel free to subsitute "can be" for "are"
*** Disclaimer: I had to write this fast so hopefully it makes sense hahaha

[taylor192]

Nice! I am definitely torn on whether or not to list mine right now or wait until the spring. I feel like there should be more people right now jumping on low interest rates and avoiding the 35 to 30 amortization period rule change.

Like Taylor said it is not happening. I am watching the condo market in Victoria and sales are very slow.
Why do you feel there should be more people jumping on low interest rates and prior to the rule changes? Serious question, the market is ruled by emotion so it is important to understand why people think this way.

In my opinion the rule changes don't affect FTBs very much right now, thus why sales have not picked up with the pending rule changes. Why do I feel this way?

From the stats, it seems first-time buyers were already sitting on the sidelines for the past 6 months. The stats show that sales of lower end units has fallen off dramatically, while mid-higher end units still sell well. This is why prices haves remained high or moved higher, since only averages are reported and less entry priced units being sold skews the prices higher.

I feel FTBs are sitting on the sidelines cause either they cannot afford a place, or are paying attention to the negative media and waiting. We're at > 70% ownership levels and back to 2008 peak prices - there's not en endless supply of people that can afford that to keep ownership levels rising.

---

If I were you I would list now and hope for a sale before the end of spring. If listings continue at this pace, or the pace picks up, unless your condo stands out from the pack in pricing or features it may sit.

I don't even know how buyers could possibly choose at this point. Just in the 20 square blocks around my condo there are > 10 2bdrm condos $500-550K with very similar features. Some areas downtown/west end/FC have more than that in 2 square blocks.

[marc0lishuz]

http://i22.photobucket.com/albums/b304/marc-o-lishuz/9abbd6c1.jpg

[jasonturbo]

:duh: Maybe someone should tell all those people about MLS.ca lol If they only knew there was thousands of other condo's for sale they wouldn't have to wait in line!

Oh wait, they are paid actors lol silly me.

[Gnomes]

I dont like MLS.ca - the format of it isnt very easy to navigate through. Pretty messy IMO. And it's a shame presales arent listed in MLS.

[taylor192]

And it's a shame presales arent listed in MLS.
Why? They can cost even more cause CREA would then get a cut.

[jasonturbo]

Canadian Association of Broadcasters'

Code of Ethics (Revised June 2002)

Clause 5 - News

(1) It shall be the responsibility of broadcasters to ensure that news shall be represented with accuracy and without bias. Broadcasters shall satisfy themselves that the arrangements made for obtaining news ensure this result. They shall also ensure that news broadcasts are not editorial.
(2) News shall not be selected for the purpose of furthering or hindering either side of any controversial public issue, nor shall it be formulated on the basis of the beliefs, opinions or desires of management, the editor or others engaged in its preparation or delivery. The fundamental purpose of news dissemination in a democracy is to enable people to know what is happening, and to understand events so that they may form their own conclusions.
(3) Nothing in the foregoing shall be understood as preventing broadcasters from analyzing and elucidating news so long as such analysis or comment is clearly labeled as such and kept distinct from regular news presentations. Broadcasters are also entitled to provide editorial opinion, which shall be clearly labeled as such and kept entirely distinct from regular broadcasts of news or analysis.
(4) Broadcasters shall refer to the Code of Ethics of the Radio and Television News Directors of Canada ("RTNDA") for more detailed provisions regarding broadcast journalism in general and to the Voluntary Code Regarding Violence in Television Programming for guidance with respect to the depiction of violence, graphic reporting of delicate subject matter or the use of explicit language in news and public affairs programming on television.

Clause 6 - Full, Fair and Proper Presentation

It is recognized that the full, fair and proper presentation of news, opinion, comment and editorial is the prime and fundamental responsibility of each broadcaster. This principle shall apply to all radio and television programming, whether it relates to news, public affairs, magazine, talk, call-in, interview or other broadcasting formats in which news, opinion, comment or editorial may be expressed by broadcaster employees, their invited guests or callers.



I also looked into the CREA realtor code of ethics but it's pretty much a joke, the only section which could even be considered relavent...


As REALTORS®, we accept a personal obligation to the public and
to our profession. The Code of Ethics of The Canadian Real Estate
Association embodies these obligations.
As REALTORS®, we are committed to:
• Professional competent service
• Absolute honesty and integrity in business dealings
• Co-operation with and fairness to all
• Personal accountability through compliance
with CREA’s Standards of Business Practice.
To meet their obligations, REALTORS® pledge to observe the spirit
of the Code in all of their activities and conduct their business in
accordance with the Standards of Business Practice and the Golden
Rule — Do unto others as you would have them do unto you.

Golden rule my ass.

EDIT** Now I just have to find the "Honest used car salesman code of ethics" for a comparisson.

[dealt]

JasonTurbo,

Please prove and provide all materials/information that you think it was the media or developer hyping the pre-sale of the condo project.

I would really love what you and all the other speculators out there have to say.

[jasonturbo]

JasonTurbo,

Please prove and provide all materials/information that you think it was the media or developer hyping the pre-sale of the condo project.



"It is difficult to get a man to understand something when his salary depends upon his not understanding it."
-Upton Sinclair

You're employed in real estate... why don't you make light of the situation for us? And being that your income is directly affected by something like this, I'm sure you'll provide an unbiased opinion.



I didn't realize the demand for condo's was so crazy here... especially after the olympic village fiasco.

http://vreaa.wordpress.com/2011/02/17/burnaby-condo-presale-lineup-more-shameless-re-promotion-presented-as-news-by-global-tv-and-cbc/

[Nightwalker]

Hahahaha, well done by the Realtor on that one. I would hire them.

They're direct marketers, their only job is to sell sell sell.

[taylor192]

JasonTurbo,

Please prove and provide all materials/information that you think it was the media or developer hyping the pre-sale of the condo project.

I would really love what you and all the other speculators out there have to say.
Its hard when the craigslist posts are deleted.

[will068]

Reminds me of clubs in France and Italy. They hire models/attractive actors to chill in their club.

[Carl Johnson]

Rent-a-crowd is nothing new but the key is not to get caught.

[q0192837465]

Damn, i bet they pay pretty well. I should start looking out for these ads

[goo3]

These people call themselves reporters and journalists... but they can't "figure out" people are being paid to stand in line hahaha. What a joke.

Well what's worse...

-Media not following a fairly basic code of eithics?
-Real estate promoting false consumer sentiment? (And they call themselves professionals/advisors???)
-Consumers not taking the time to educate themselves

Do you think the media's being slimy? Or is the quality just low? I tend to think it's more: meet the deadline, slap it together, send it out.

[jasonturbo]

Do you think the media's being slimy? Or is the quality just low? I tend to think it's more: meet the deadline, slap it together, send it out.

Twice in one week? lol

And it certainly wasn't presented in an impartial manner lol It was like watching a fucking real estate commercial IMO lol.

At the end of the day, the real fail here is consumers failing to make informed decisions... trouble is people "trust" the news to delivers... well.. actual news lol

EDIT** So while people are waiting days in line to buy in Burnaby... downtown they are marking condo's down 34%

http://www.news1130.com/news/local/article/185499--rennie-priority-is-selling-condos-at-village-on-false-creek

[alwaysideways]

Quite frankly props to the developer for building hype in a tenuous market. I like there style!

If anyone on here had the money or power to use the media for their own profitable gains I highly doubt that they would think twice. I know I sure as hell wouldn't!

[quasi]

I don't really see anything wrong with this it's just another form of advertising. It's already been said but when your making this large of a purchase you need to educate yourself on the market and what similar places are going for. If they've done their homework the line isn't going to make a difference one way or the other.

[taylor192]

I don't really see anything wrong with this it's just another form of advertising. It's already been said but when your making this large of a purchase you need to educate yourself on the market and what similar places are going for. If they've done their homework the line isn't going to make a difference one way or the other.
There is nothing "wrong" with it - yet it only makes the sleazy real estate market that much sleazier.

Do you think Realtors and Developers like being equated to used car salesmen? I would hope not, yet stunts like this don't help their image.

[jasonturbo]

Lol the realtors can't be blamed for being sleazyballs, but the media can.

Then again the CREA clearly states on their website "A REALTOR®’s ethical obligations are based on moral integrity, competent service to clients and customers, and dedication to the interest and welfare of the public."

I would half to say that "hiring actors to stand in line" might not qualify as moral integrity.

(Yes in this case we had a "developer" who is responsible, but they are more than likely respresented by licensed realtors and this type of deception is used frequently by the industry during poor market conditions)

[quasi]

There is nothing "wrong" with it - yet it only makes the sleazy real estate market that much sleazier.

Do you think Realtors and Developers like being equated to used car salesmen? I would hope not, yet stunts like this don't help their image.

They are salesmen, if the shoe fits. :)

[alwaysideways]

They are salesmen, if the shoe fits. :)


Probably why I see nothing wrong with it :fullofwin:

[stuff99]

Bosa didn't pay people to line up. It's Bosa. The thing sold out in 5 hours.

It's realtors paying people to line up. Bosa knew it will sell out fast.

All mainlanders that bought the place.

[hirevtuner]

most mainlanders that bought it are just flippers, watch in a year or 2 full of the ads for this place will pop up for sale again but at a higher price

[jasonturbo]

Bosa didn't pay people to line up. It's Bosa. The thing sold out in 5 hours.

It's realtors paying people to line up. Bosa knew it will sell out fast.

All mainlanders that bought the place.

Where did you hear this? Global news?

I'm gonng head down to Bosa and if every one of those units isn't sold I'm coming back here to call you out on your bull shit. :D

[stuff99]

Where did you hear this? Global news?

I'm gonng head down to Bosa and if every one of those units isn't sold I'm coming back here to call you out on your bull shit. :D


Bosa tweet: Thank you #Vancouver! We are pleased to announce that we've added 202 new members to our family of homeowners! Sovereign is Sold Out! about 7 hours ago via web

Also: http://www.globaltvbc.com/video/index.html?releasePID=1RoJA82LwhPRzJtGoQi9T3crW4Er ATrm

[Spooling]

Bosa soverign sold out onn 1st day
is true

[dealt]

So JasonTurbo,

Paid actors right?

[Ch28]

So JasonTurbo,

Paid actors right?

Pretty much.

I think people that stood there for the whole day got like $300 or something.

[Anjew]

i'm sure its in bosa's best interest to keep the hype on. paid actors makes sense as it "motivates" these buyers to commit..

ever heard someone say "we have a another buyer lined up"..... a ploy to speed up the closing, which worked....

[jasonturbo]

Wow I can't believe it sold out lol.

I never said it wouldn't though, you should never under estimate the ignorrance of the general population.

Oddly enough, the one news netwok to broadcast this... you guessed it.. Global News lol

http://www.youtube.com/watch?v=thVzvvuoN8s

EDIT**
http://vancouver.en.craigslist.ca/bnc/reo/2224355942.html

Let the flipping begin!!! (I guess paying someone 300$ to stand in line beats 25k for an assigment lol)

[Milhouse]

Fuck, all of the buyers are Asians or Mainlanders.

[alpinestars]

this condo costs a ridiculous $600 sq/ft. that's comparable to a downtown condo

what's so special about it? it's located IN metrotown area.

in order to utilize the key selling feature of this property, you'd need to really like/need to be in the metrotown area a lot. this means that you either:

- work in metrotown area, and regard short travel times as an extremely valuable part of your life
- love shopping and eating out at metrotown
- combination of both

so, to all the eager buyers that plan on purchasing this property to live in it, i hope you folks really, really, really love metrotown area. because you paid practically the same cost as a condo in downtown. the only similarities between the two places are they both end in 'town'

[taylor192]

this condo costs a ridiculous $600 sq/ft. that's comparable to a downtown condo

That's retarded. My Kits condo is < $550 sq/ft, and blocks away from Jericho beach.

[jasonturbo]

I'm sorry but can someone explain to me how we can confirm these people are in fact "Mainlanders"... seems to be a bit of an assumption to me.

I can see why people would be interested in pre build, you only have to come up with very little money up front, the hope for many of these people is usually that they will be able to turn around and sell these units without ever taking possesion. (At a profit of course)

The cost to secure a unit like this is minimal compared to what you can flip it for providing real estate goes up, most people think if real estate goes down you just lose your deposit but thats far from the reality. If you enter into a contractual agreement with the developer you are on the hook, you can walk away but they will go after you for any losses they suffer. On top of that, much of the time the warranties from builders are only issued to the person(s) who initially secured the condo, the warranties are rarely transferable to the new owner(s). (Quite the selling feature...)

Who knows, maybe those people made a great investment, maybe they weren't investors and just purchased their dream home in their ideal location.

I think they're all crazy. Should have just bought a condo down the street for the same/less money and been able to move in next month and sell the month after if you decide you dont like it. Good luck selling your contract to someone for one of these places in 6 months.

[guesswho]

Wow I can't believe it sold out lol.

I never said it wouldn't though, you should never under estimate the ignorrance of the general population.

Oddly enough, the one news netwok to broadcast this... you guessed it.. Global News lol

http://www.youtube.com/watch?v=thVzvvuoN8s

EDIT**
http://vancouver.en.craigslist.ca/bnc/reo/2224355942.html

Let the flipping begin!!! (I guess paying someone 300$ to stand in line beats 25k for an assigment lol)

watched the whole vid and the it was all mainlanders inside that building except for the workers...

[civicyvr]

I'm sorry but can someone explain to me how we can confirm these people are in fact "Mainlanders"... seems to be a bit of an assumption to me.

I can see why people would be interested in pre build, you only have to come up with very little money up front, the hope for many of these people is usually that they will be able to turn around and sell these units without ever taking possesion. (At a profit of course)

The cost to secure a unit like this is minimal compared to what you can flip it for providing real estate goes up, most people think if real estate goes down you just lose your deposit but thats far from the reality. If you enter into a contractual agreement with the developer you are on the hook, you can walk away but they will go after you for any losses they suffer. On top of that, much of the time the warranties from builders are only issued to the person(s) who initially secured the condo, the warranties are rarely transferable to the new owner(s). (Quite the selling feature...)

Who knows, maybe those people made a great investment, maybe they weren't investors and just purchased their dream home in their ideal location.

I think they're all crazy. Should have just bought a condo down the street for the same/less money and been able to move in next month and sell the month after if you decide you dont like it. Good luck selling your contract to someone for one of these places in 6 months.

JT. It makes sense they are mainlanders buying most likely for investment/flipping. They don't need to move in right away and if prices go down there's no recourse in China. Hahah.

I do hate how this sh1et inflates R.E prices so normal joe blows like you and I cant afford it.

[sh0n]

this condo costs a ridiculous $600 sq/ft. that's comparable to a downtown condo

what's so special about it? it's located IN metrotown area.

in order to utilize the key selling feature of this property, you'd need to really like/need to be in the metrotown area a lot. this means that you either:

- work in metrotown area, and regard short travel times as an extremely valuable part of your life
- love shopping and eating out at metrotown
- combination of both

so, to all the eager buyers that plan on purchasing this property to live in it, i hope you folks really, really, really love metrotown area. because you paid practically the same cost as a condo in downtown. the only similarities between the two places are they both end in 'town'

Few things why this project was sold to overwhelming demand at the $600 /sq price point

- Location (You're in the heart of Metrotown close to all the shopping, amenities and transit)
- You get so called Bosa quality (one of the better developers IMO). The project featured the higher end finishings and fixtures
- The first floor of the residential is on the 21st floor - you are guaranteed a decent view.
- It will be anchored by a well known hotel chain with shops and retail at grade.
- There is no similar comparable property or even project on the market place. A project like this given the location and price point has been long overdue.

Overall, its a great building but overhyped IMO. I really hope for whoever brought, they were buying their dream home. For the flippers, I hope we get a condo crash and you are left to overpay.

It's sad to say, that Vancouver RE buyers/investors are a pre-sale city. These suckers are contractually obligated to buy a product priced today in 4 years timeframe. You are basically betting that the price paid today will be less than what it is 4 years from now but if it goes the other way, you're screwed.

[Tapioca]

That's retarded. My Kits condo is < $550 sq/ft, and blocks away from Jericho beach.

Apples and oranges.

Metrotown is the hub for newer Chinese immigrants (mainland China and Taiwan.) The Crystal Mall (which is right across the street from this tower) is the one-stop shop for all things Chinese north of the Fraser.

[taylor192]

Apples and oranges.

Metrotown is the hub for newer Chinese immigrants (mainland China and Taiwan.) The Crystal Mall (which is right across the street from this tower) is the one-stop shop for all things Chinese north of the Fraser.
Apples and rotten apples.

This is just greed. Prices around Metrotown do not support the price of this development.

Using the same logic the condos surrounding TnT downtown Vancouver would sell for a premium, especially considering the builders and amenities. Yet you can find condos in that area for < $600 sqft and not priced more than the surrounding area, ie no premium for location.

Using the same logic any condo near Westminister and No 3 in Richmond would sell for a premium, yet they sell for even less than near Metrotown.

[RiceIntegraRS]

JT. It makes sense they are mainlanders buying most likely for investment/flipping. They don't need to move in right away and if prices go down there's no recourse in China. Hahah.

I do hate how this sh1et inflates R.E prices so normal joe blows like you and I cant afford it.

So is this the reason why R.E prices are the way they are in vancouver?
Posted via RS Mobile (http://www.revscene.net/forums/announcement.php?a=228)

[stuff99]

I actually would've loved to been able to afford a place their...that's why I know so much about this development but I just couldn't afford it.

I work around the area and everything I need would be at Metro and Crystal Mall. Very convient. The price however and the line ups were too insane for me to get in the action.

Also, I didn't like the idea of having all mainlanders as my neighbors. Hopefully the market will crash (doubt it) and I can scoop in later.

[taylor192]

So is this the reason why R.E prices are the way they are in vancouver?
Posted via RS Mobile (http://www.revscene.net/forums/announcement.php?a=228)
No, just one of many factors.

Lets just say that prices are up everywhere in Canada over the last decade, Vancouver more than elsewhere, yet lets not focus on that for now. Why have prices increased everywhere?
- lower interest rates
- lower down payments
- longer amortizations
- less strict mortgage qualification rules

Studies show for every measure to make housing more affordable, the percentage of home owners increase. More home owners == more buyers == more demand == higher prices if supply doesn't keep up.

I've heard the steretypes that Asians prefer new condos and will pay a premium for a unit that has not been lived in - yet unless they flip it without ever occupying it, then that unit now becomes a used unit that no-one is lining up down the street to buy.

[taylor192]

I actually would've loved to been able to afford a place their...that's why I know so much about this development but I just couldn't afford it.

I work around the area and everything I need would be at Metro and Crystal Mall. Very convient. The price however and the line ups were too insane for me to get in the action.

Also, I didn't like the idea of having all mainlanders as my neighbors. Hopefully the market will crash (doubt it) and I can scoop in later.

Why not buy in one of the many other buildings in the area? For the price difference you could easily upgrade any similar unit to be better than the units Bosa was offering.

[sh0n]

To go back on my last post Re: $600 /sq ft

It was the studios that were in the $625 range I believe.

The 1BR were high $500's per to low $600's per sq ft
The 2BR were at a sweet point at mid $500's per sq ft

@Stuff99: don't worry that you couldn't get in for this building. There are some great up and coming Metrotown projects by prominent developers that will launch in the next 2-4 months.

[sh0n]

Why not buy in one of the many other buildings in the area? For the price difference you could easily upgrade any similar unit to be better than the units Bosa was offering.

People like new and shiny. For some, even though if they can buy a comparable property (same or more sq ft) at a less price - they don't want to go through the hassle of going through a renovation.

And again, you are buying the so called Bosa "quality" and the "sovereign name"

[taylor192]

People like new and shiny. For some, even though if they can buy a comparable property (same or more sq ft) at a less price - they don't want to go through the hassle of going through a renovation.

And again, you are buying the so called Bosa "quality" and the "sovereign name"
Yet they are willing to wait 3 years. I'm calling BS on that.

This is pure speculation.

[sh0n]

Yeah it is pure speculation.

Just want to wait and see 1-2 weeks or even a month or two from now if we see anyone assigning their contracts.

[Death2Theft]

Dont think many buildlings nearby will have quite that same view. I hope the mainlanders enjoy sharing 3 elevators with the hotel guests. Wonder what happens when one elevator is broken. Dont feel bad for missing out on this.
Why not buy in one of the many other buildings in the area? For the price difference you could easily upgrade any similar unit to be better than the units Bosa was offering.

[Anjew]

metrotown is very attractive because its a viable alternative to richmond which has the reputation of going under when earthquake happens....

its expensive compared to the others because its in an an area which is arguably better than the other areas in terms of convenience that wont require a vehicle.


pro:
metrotown is one of the biggest and most complete malls in the lower mainland
superstore is close enough to not need a vehicle
silvercity
crystal mall
libary
police office
central park
10 minute drive to richmond.
bonsor
skytrain
bus hub to everywhere
less than 5 minute drive to highway 1.
highest tower
new
bosa(reputation)

con:
price
living with mainlanders with bad habits

[ImportPsycho]

if you check the pricing on regular new condos in burnaby, they are pretty close to $600/sq already(21st floor up), $600/sq for this this supposedly "luxury" condo is no suprise.

[Meowjin]

http://english.aljazeera.net/indepth/opinion/2011/02/2011218151257526294.html

enough said.

[jasonturbo]

The main reason RE is so expensive is not because of "Mainlanders". This is not a condition local to Vancouver, it's a constant all over Canada and caused by Canadians.

Basically the major factor is this, back in 2001, housing started it's climb up to where it is today, first Canadians caught wind of what was going on south of the border along with an "at the time" booming natural resource economy, money was flying around everywhere in Canada and much of it IMO was driven by the high price of Oil and NG. (Though NG would tank much sooner than oil)

So people have money, interest rates are decent, and RE is still affordable back in 2001-2003, so people are buying. Well after two years of fantastic RE sales due to the economic conditions, the prices are starting to creep up and some people are starting to see their property increase in value do to the rules of supply and demand, this is when the speculators get involved.

So you take a housing market (Remember, this is most of Canada, not just Vancouver) that is already low on inventory, and a strong economy, and people that bought 2-3 years prior telling everyone they know that "My house has gone up in value by XX dollars since I bought" and this sentiment spreads like wildfire, people with capital catch on pretty quick and start buying as much as they can.

So now the speculators drive up the price, the average person also wants to buy before they get priced out and they further drive up the cost of housing, to the point that the finance minister gives the ok for 0 down 40 year mortgages, drastically reducing the minimum requirements to obtain a mortgage in Canada. This action is like fanning the flames, it just makes the buying and speculation worse, now you have the average citizen not just buying one property, but two if they can get the second mortage on it, thinking they will flip in a year or two... or they buy pre-builds and hope they can flip in a year once it's been built.

So thats why prices got so retarted, it started out as a ustified housing boom, and turned into a speculative bull run, then the Govt stepped in and allowed everyone to leverage themselves into oblivion to avoid a US style housing crash.

Thats a decently short version and I wrote this quick, but thats my take on things. There is a lot of other minor details like some excellent advertising work done by developers, realtors, and media. If you look at the number of realtors in Canada 10 years ago vs today it's insane. (Tried to find a graph sorry :( )

Here is a price to rent index, once upon a time the cost of ownership was so low you could make money renting a place out with a 25 year mortgage, with todays prices and a conventional down payment it costs an average of twice the cost of rent to own.
http://www.tradersnarrative.com/wp-content/uploads/2009/11/canadian%20real%20estate%20price%20to%20rent%20rat io%20ScotiaBank%20report.png

It's a giant housing bubble, it's going the same way as the USA, when the herd is going one way, smart investors tend to go the other. Oh well, to all the people with 35 year VRM's good luck, and if the Govt steps in and fucking bails out home owners with my tax dollars I swear to allah I will make Jihad on Ottawa.

[taylor192]

Dont think many buildlings nearby will have quite that same view.

View of what?

Using that logic, my kits condo with a view of the ocean and mountains should be worth far more than these.

[taylor192]

It's a giant housing bubble, it's going the same way as the USA, when the herd is going one way, smart investors tend to go the other. Oh well, to all the people with 35 year VRM's good luck, and if the Govt steps in and fucking bails out home owners with my tax dollars I swear to allah I will make Jihad on Ottawa.
There are a lot of angry Americans at Obama for giving away home to people who made bad decisions.

If Harper does the same I will be forced to stop voting, as there won't be a party that is financially sound enough to vote for.

[taylor192]

if you check the pricing on regular new condos in burnaby, they are pretty close to $600/sq already(21st floor up), $600/sq for this this supposedly "luxury" condo is no suprise.

"new" is the key word here. Every "new" condo is eventually resold as a "used" condo, and the used condo market does not support $600 sq/ft

[stuff99]

Why not buy in one of the many other buildings in the area? For the price difference you could easily upgrade any similar unit to be better than the units Bosa was offering.

I want something new.

Not sure why you're so upset about this. I didn't end up buying cause it wasn't in my price range. It would've been nice to be able to afford it but it wasn't affordable so I didn't get it.

Calm down.

It'd be nice to get a Porsche too. Try not to spaz out on that as well.

[taylor192]

I want something new.

Not sure why you're so upset about this. I didn't end up buying cause it wasn't in my price range. It would've been nice to be able to afford it but it wasn't affordable so I didn't get it.

Calm down.

It'd be nice to get a Porsche too. Try not to spaz out on that as well.
No-one is spazing, we're calmly calling people who buy at these prices stupid. If you're offended, then too bad.

As long as your stupidity doesn't cost me tax dollars, then you can do as you please. Yet if you leave < 20% down you take CMHC insurance and are a liability to me the tax payer for your poor decision to buy more than the market is telling you it is worth.

Since you're having difficulty affording in that price range, you're probably one of the people likely to cost me tax dollars eventually, and I should rightfully be concerned.

[stuff99]

No-one is spazing, we're calmly calling people who buy at these prices stupid. If you're offended, then too bad.

As long as your stupidity doesn't cost me tax dollars, then you can do as you please. Yet if you leave < 20% down you take CMHC insurance and are a liability to me the tax payer for your poor decision to buy more than the market is telling you it is worth.

Since you're having difficulty affording in that price range, you're probably one of the people likely to cost me tax dollars eventually, and I should rightfully be concerned.

I didn't buy because I didn't like the prices but I like the location and the developer. I don't understand why that is so hard for you to understand.

I was interested in the property until the prices came out and felt that it wasn't for me. It's still a nice development. I think it is unfair to label me as one of those that will cost you tax dollars when I have a sticker price I'm willing to pay and if it wasn't met I walked away. It's offense because you paint me with the same brush. If I CAN afford that price, it's still ignorant on your part to accuse people for paying stupid prices for a place they may enjoy living it. Some might argue people paying an insane amount to live in Kits is stupid too. At the end of the day value and pricing is a relative thing.

Anyways I never meant for this to be an internet debate. I just wanted to say that its a nice location with nice floor plans but a tad high price point. I also did not like that most people that purchased the place will probably flip the property for profit but that's the way it goes.

As for the prices being "stupid" so are the housing prices in general in Vancouver. It is what it is.

If I can afford Kits and downtown I would too but I don't work there and parking is too troublesome. The fact is, a new development in downtown or Kits will end up costing more than in Burnaby (including Sovereign). You cannot get a 21st floor condo for the same price point. I am sure the property taxes are higher in Vancouver too.

To each their own right?

Perhaps I should end this with a :) to make it better for all involved.

[jasonturbo]

The subject of what's "affordable" is a funny one. What some people consider "affordable" at 5% down and 35 years of payments at a scant 3% VRM lets say,.. is very different from the traditional 20% down over 25 years at historically normal 6.5%

So consider for a minute the difference in what someone has to pay...

450000$ -5% down is 427500, and mortgaged over 35 years at 3% is about 1640$ a month and youre paying about 261000$ in interest over that time. Now lets be more realistic and say you end up at a 6.5% rate averaged out over time, then you end up with 2550$ per month and paying nearly 650000$ in interest.

Now on the other side of the fence, old school lending standards here,
450000$ -20% is 360000$ and mortgaged over 25 years at 6.5% is about 2400$ a month and you will have paid 363000$ in interest.

So in a realistic situation, that extra 15% down which was 67500$ saved you 287000$ worth of interest to the bank.

Basically what I am getting at it this, all those people that insist on buying cause of low rate VRM's and long mortgage terms are just fucking themselves royally in the long run, and it also happens to be the only reason why they even qualify for a mortgage. Now in a normal world lending companies might be a little more strict but when the bank is protected by CMHC in canada they don't exactly have a lot of risk.

The majority of buyers that fueled the boom in the last three years are buyers that bought on emotion, not on intelligent financial practices.

So stuff99 when you bring up the issue of affordability and then say the prices of that building didnt make you happy, the reality IMO is that the prices on any piece of property in the lower mainland shouldnt make you happy or seem any more affordable.

Just my .02

EDIT** Just for the sake of my amusement, lets say that same 5/35 mortgage at 6.5% above was actually a 25 year, the payments would be like this, 2860/month and interest paid would be 431000$... yikes.. its no wonder everyone is jumping on 35 year VRM... cause they cant afford property any other way, one look at the median household income in the lower mainland tells you this is very true.

[taylor192]

I didn't buy because I didn't like the prices but I like the location and the developer. I don't understand why that is so hard for you to understand.
I wrote 2 sentences to you and you accused me of spazing, and now you continue to complain I don't understand. If you understood my respond you'd get it, yet you don't.

I was interested in the property until the prices came out and felt that it wasn't for me. I think it is unfair to label me as one of those that will cost you tax dollars when I have a sticker price I'm willing to pay and if it wasn't met I walked away. It's offense because you paint me with the same brush.
Then none of the "stupid" comments apply to you. I don't understand why you're offended, since you didn't buy at that price the label doesn't fit and no-one painted you with that brush. We labeled and painted the stupid people.

If I CAN afford that price, it's still ignorant on your part to accuse people for paying stupid prices for a place they may enjoy living it. Some might argue people paying an insane amount to live in Kits is stupid too. At the end of the day value and pricing is a relative thing.
We all make stupid decisions with money. I have wasted tons of money modding my car yet I enjoyed doing so. I will not pretend it was a smart decision, and if its not a smart decision... it is a <filll in the blank> decision.

Pricing is a "market" thing, not "relative". Just cause a bunch of stupid people just overpaid for "relative" quality doesn't mean the "market" has adjusted. As we near the end of Feb sales are below average and active listings soaring, so the market is saying it is overbought and flattening - yet stupid people line up to pay above market prices.

The condo I referenced in Kits in below market average for Kits, despite still being an insane amount.

It is ignorant and stupid to ignore the market.

As for the prices being "stupid" so are the housing prices in general in Vancouver. It is what it is.
Now I get it, you don't understand what we mean by "stupid", I'll clarify since you're having trouble with it:

It is stupid to pay more than market value in today's market.

Since we both agree most of the buyers are speculators, then we can both agree they are stupid.

The fact is, a new development in downtown or Kits will end up costing more than in Burnaby (including Sovereign). You cannot get a 21st floor condo for the same price point.
You are correct, you cannot get a "new" condo, yet you can get a 26th floor condo above TnT downtown with an excellent view of false creek for less than Sovereign just sold for - with cash left over to renovate and you can move in today.

To each their own right?

Perhaps I should end this with a :) to make it better for all involved.
:)

Yes to each their own - as long as it does not affect me the tax payer. Read some articles about the housing overhang impact in Spain and see how many wrapping up significant amount of wealth in housing has killed that economy.

So the problem is, its never "to each their own" as if enough people make these stupid decisions it affects me.

[stuff99]

The pricing of new condos in the Metro area is around the same price point as the Bosa development.

Take a look at perspectives, affinity, and the few other ones by Patterson station. That is the market price right now.

[stuff99]

The subject of what's "affordable" is a funny one. What some people consider "affordable" at 5% down and 35 years of payments at a scant 3% VRM lets say,.. is very different from the traditional 20% down over 25 years at historically normal 6.5%

So consider for a minute the difference in what someone has to pay...

450000$ -5% down is 427500, and mortgaged over 35 years at 3% is about 1640$ a month and youre paying about 261000$ in interest over that time. Now lets be more realistic and say you end up at a 6.5% rate averaged out over time, then you end up with 2550$ per month and paying nearly 650000$ in interest.

Now on the other side of the fence, old school lending standards here,
450000$ -20% is 360000$ and mortgaged over 25 years at 6.5% is about 2400$ a month and you will have paid 363000$ in interest.

So in a realistic situation, that extra 15% down which was 67500$ saved you 287000$ worth of interest to the bank.

Basically what I am getting at it this, all those people that insist on buying cause of low rate VRM's and long mortgage terms are just fucking themselves royally in the long run, and it also happens to be the only reason why they even qualify for a mortgage. Now in a normal world lending companies might be a little more strict but when the bank is protected by CMHC in canada they don't exactly have a lot of risk.

The majority of buyers that fueled the boom in the last three years are buyers that bought on emotion, not on intelligent financial practices.

So stuff99 when you bring up the issue of affordability and then say the prices of that building didnt make you happy, the reality IMO is that the prices on any piece of property in the lower mainland shouldnt make you happy or seem any more affordable.

Just my .02

EDIT** Just for the sake of my amusement, lets say that same 5/35 mortgage at 6.5% above was actually a 25 year, the payments would be like this, 2860/month and interest paid would be 431000$... yikes.. its no wonder everyone is jumping on 35 year VRM... cause they cant afford property any other way, one look at the median household income in the lower mainland tells you this is very true.

I suppose I should clarify. I wasn't comfortable paying that amount for a condo with no land value and the cost per sq footage at Bosa.

[stuff99]

I wrote 2 sentences to you and you accused me of spazing, and now you continue to complain I don't understand. If you understood my respond you'd get it, yet you don't.


Then none of the "stupid" comments apply to you. I don't understand why you're offended, since you didn't buy at that price the label doesn't fit and no-one painted you with that brush. We labeled and painted the stupid people.


We all make stupid decisions with money. I have wasted tons of money modding my car yet I enjoyed doing so. I will not pretend it was a smart decision, and if its not a smart decision... it is a <filll in the blank> decision.

Pricing is a "market" thing, not "relative". Just cause a bunch of stupid people just overpaid for "relative" quality doesn't mean the "market" has adjusted. As we near the end of Feb sales are below average and active listings soaring, so the market is saying it is overbought and flattening - yet stupid people line up to pay above market prices.

The condo I referenced in Kits in below market average for Kits, despite still being an insane amount.

It is ignorant and stupid to ignore the market.


Now I get it, you don't understand what we mean by "stupid", I'll clarify since you're having trouble with it:

It is stupid to pay more than market value in today's market.

Since we both agree most of the buyers are speculators, then we can both agree they are stupid.


You are correct, you cannot get a "new" condo, yet you can get a 26th floor condo above TnT downtown with an excellent view of false creek for less than Sovereign just sold for - with cash left over to renovate and you can move in today.


:)

Yes to each their own - as long as it does not affect me the tax payer. Read some articles about the housing overhang impact in Spain and see how many wrapping up significant amount of wealth in housing has killed that economy.

So the problem is, its never "to each their own" as if enough people make these stupid decisions it affects me.

The market prices have been inflated for a long time...at some point you just got to realize maybe this is the cost of housing here in Vancouver? Being named the best place in the world to live in comes at a cost.

[Tapioca]

@jasonturbo

Buying a home is still somewhat affordable for well-to-do yuppies. A couple of friends of mine bought a home in East Van a couple of years ago in the 550K range and I'm certain that they make probably 150K or more per year as a couple. If their mortgage payment is in the 2500 range + plus a basement suite bringing in 700-1000/month, it's not hard for them to make ends meet.

Also, another thing you've failed to consider is wealth transfer and home equity lines of credit.

Sure, there are a lot of couples who make 60K/year, but there are just as many who make 150-200K/year under 40. (You seem pretty successful yourself and I wouldn't be surprised if you're close to 6-figures.) Until one who works on the financial side (a mortgage lender or someone like that) chimes in and tells us how much cash is actually being thrown around, we can only speculate on what's driving the market.

[taylor192]

Also, another thing you've failed to consider is wealth transfer and home equity lines of credit.
This only works if your house appreciates. Houses only appreciate if there are buyers. Stick with me.

Sure, there are a lot of couples who make 60K/year, but there are just as many who make 150-200K/year under 40. (You seem pretty successful yourself and I wouldn't be surprised if you're close to 6-figures.)
The top 5% of earners starts a $89K/yr. Double that and you're in the middle of the $150-200K range you quotes as being "just as many".

Lets dive even further:
~1.2M people earn > $89K
13% of those live in BC, or ~150K
If all of those 150K lived in Vancouver, that would represent 7% of all Vancouverites

7% at best is not "just as many". Wow, have we ever lost sight of reality.

Until one who works on the financial side (a mortgage lender or someone like that) chimes in and tells us how much cash is actually being thrown around, we can only speculate on what's driving the market.
My broker chimed in on this last year. He sold a $300K mortgage to 2 Loblaws (aka Superstore) employees making $25K/yr each.

Now, remember when I said stay with me? if those Loblaws employees cannot buy, then no wealth is transferred. Houses don't appreciate when there's no buyers to drive up prices.

Very little actual cash is being thrown around, just people buying and driving up prices.

[Tapioca]

The top 5% of earners start at $89K/yr. Double that and you're in the middle of the $150-200K range you quotes as being "just as many".

Lets dive even further:
~1.2M people earn > $89K
13% of those live in BC, or ~150K
If all of those 150K lived in Vancouver, that would represent 7% of all Vancouverites

7% at best is not "just as many". Wow, have we ever lost sight of reality.

I'll admit that I don't really look at statistics the same way you do. But, I think that people under 40 are doing better than what the statistics indicate. I attended my ten year high school reunion last summer and naturally, we discussed how we're doing professionally. I would say over half of the people are in what I would call "professions". These would include:
- Mechanics
- Medical practioners
- Planners and consultants
- Oil and gas workers
- Education/teaching
- Finance-related

At minimum, I don't think it's a stretch to say that half of the people are making salaries in the 50-60K range. With maybe 5-8 more years under their belt, it's not a stretch to say that they'll be in the high 70-80s. I went to public school in East Vancouver which in the 1980s was largely blue-collar and immigrant-based. So, you take a little bit of home equity, savings from living at home, and you can maybe see how the numbers work.

[stuff99]

This only works if your house appreciates. Houses only appreciate if there are buyers. Stick with me.


The top 5% of earners starts a $89K/yr. Double that and you're in the middle of the $150-200K range you quotes as being "just as many".

Lets dive even further:
~1.2M people earn > $89K
13% of those live in BC, or ~150K
If all of those 150K lived in Vancouver, that would represent 7% of all Vancouverites

7% at best is not "just as many". Wow, have we ever lost sight of reality.


My broker chimed in on this last year. He sold a $300K mortgage to 2 Loblaws (aka Superstore) employees making $25K/yr each.

Now, remember when I said stay with me? if those Loblaws employees cannot buy, then no wealth is transferred. Houses don't appreciate when there's no buyers to drive up prices.

Very little actual cash is being thrown around, just people buying and driving up prices.

Just curious where are you pulling these numbers from?

[taylor192]

I'll admit that I don't really look at statistics the same way you do. But, I think that people under 40 are doing better than what the statistics indicate. I attended my ten year high school reunion last summer and naturally, we discussed how we're doing professionally. I would say over half of the people are in what I would call "professions". These would include:
- Mechanics
- Medical practioners
- Planners and consultants
- Oil and gas workers
- Education/teaching
- Finance-related

At minimum, I don't think it's a stretch to say that half of the people are making salaries in the 50-60K range. With maybe 5-8 more years under their belt, it's not a stretch to say that they'll be in the high 70-80s. I went to public school in East Vancouver which in the 1980s was largely blue-collar and immigrant-based. So, you take a little bit of home equity, savings from living at home, and you can maybe see how the numbers work.
I like numbers, its the engineering side of me. I also like sociology/psychology to explain what the numbers cannot.

What you described I'll call "locker room theory", let me explain: I hate it when I go to my locker at the gym and someone is using the locker right beside me. It seems like it happens far too often. In truth, it rarely happens. I only remember when it does happen - thus why it seems like it is so often.

Apply the same to your circle of friends. Scan the list of jobs you quoted, most are interesting jobs that would be memorable. Are you going to remember those with the interesting jobs you listed? or those who manage grocery stores, pickup garbage, ...?

I actually think people under 40 are doing far worse than the numbers show. Seniors have the highest average salary, and have made the highest salary gains of any age bracket in the last couple decades. If you average out seniors, then everyone else is actually doing worse than decades ago.

Yet before we get too far off topic, revisit my Loblaws employee example. $50K total income buys $300K mortgage. Thus $80K income buys $500K. The average in Vancouver family income is just shy of $70K, thus the average family can afford a ~$450K mortgage.

This is why house prices are crazy. When the average family can spend half a million dollars under the current rules, then prices go up. If they couldn't afford it, then wealth cannot be transferred as existing owners cannot sell to move up.

Its really that simple, just on a grander scale in Vancouver cause it is s desirable place to live, and real estate dominates conversations here.

[taylor192]

Just curious where are you pulling these numbers from?
Statscan. Its my favourite source since it is usually unbiased and hard to refute.

[jasonturbo]

Another interesting number is the average Canadian down payment is at 7% lol I guess people like giving their money to the banks. (In the form of interest)

I do make well over 6 figures and have no interest in buying real estate in Vancouver, also depending on the list you read, Van has been long since knocked off the list of best places to live in Canada and the world, mainly due to the cost of living.

Having said that, you could probably replace the tap water here with cat piss and I still wouldnt want to leave.

At the end of the day, is the value of real estate here far beyond what the average income earner can afford? Accoding to stats can and conventional financial wisdom the answer is yes. Is it possible we are heading into a new age where being house poor is the new norm? I suppose it's possible, but just as the herd runs one way, the run the other just as fast so IMO it's impossible to predict what will happen. You should never under estimate peoples stupidity, and to be honest, once I can immigrate to the states I will probably reside south of the border.

[Meowjin]

2500 a month mortgage? LOL.

even if you put 200k on a 35 year mortgage, at 800k (average house price)

your still playing over 3k a month for a mortgage.

[TouringTeg]

Great info here guys.

I just want to comment that although people are limited by their salary (Say avg family income of 70k), people are still making it happen. Families with multiple generations in one home, renting out suites, renting rooms, international students, help from parents etc.

I own two condos in Victoria (one residence and one investment). I rent a room in my 2bdr condo.

The Spain situation is downright scary:
http://www.financialpost.com/news/features/Housing+market+overhang+traps+Spaniards+debt/4325059/story.html

[jasonturbo]

I'll admit that I don't really look at statistics the same way you do. But, I think that people under 40 are doing better than what the statistics indicate. I attended my ten year high school reunion last summer and naturally, we discussed how we're doing professionally. I would say over half of the people are in what I would call "professions". These would include:
- Mechanics
- Medical practioners
- Planners and consultants
- Oil and gas workers
- Education/teaching
- Finance-related

At minimum, I don't think it's a stretch to say that half of the people are making salaries in the 50-60K range. With maybe 5-8 more years under their belt, it's not a stretch to say that they'll be in the high 70-80s. I went to public school in East Vancouver which in the 1980s was largely blue-collar and immigrant-based. So, you take a little bit of home equity, savings from living at home, and you can maybe see how the numbers work.

The main problem with this post is this,

You have a select sampling,

These people all
-Graduated high school
-Cared to attend a reunion

Most of the lower income earners probably did not graduate and were even less likely to attend a reunion where they would be judged for being unsuccessful... and some of them are probably lying about their finances lol.

Look at it is like this, they measure median household income the same way year over year, just like they measure average cost of single family home every year... it's all about the constant variables which are examined that provide reliable data.

So food for thought on that,

2000 Median household income 49940$
2001 Single family home 380000$ (just couldnt find 2000 price so used 2001)

2010 Median household income 58200$
2010 Single family home 987000$

So in the same time median household income went up 9000$/year, the cost of the average house has increased by 607000$

[taylor192]

Great info here guys.

I just want to comment that although people are limited by their salary (Say avg family income of 70k), people are still making it happen. Families with multiple generations in one home, renting out suites, renting rooms, international students, help from parents etc.

I own two condos (one residence and one investment). I rent a room in my 2bdr condo.

The Spain situation is downright scary:
http://www.financialpost.com/news/features/Housing+market+overhang+traps+Spaniards+debt/4325059/story.html
I used to rent bedrooms in my townhome to make the mortgage more affordable, so good plan to rent out the spare room!

I find it awful that "people are still making it happen". It means the rules aren't tough enough to discourage people from the wealth trap.

Spain is especially scary, cause it is already happening here. Think about your friends/family that own and how many of them have cut back on expenses to be able to afford the mortgage - in particular any FTB who has bought in the last couple years. My old neighbours in Ottawa did exactly this, going out less cause they had less disposable income. My coworkers in Vancouver often cite their mortgage as a reason why they cannot afford to do as much as I do. I have lost teammates in Vancouver cause once they bought they could nolonger afford the sports team fees. Hell when I moved into my rented condo the landlord asked if I'd throw the previous tenant a couple hundred $$$ for moving in early, the previous tenant had just bought and could probably use the money. ARG! If you can afford a half million dollar mortgage, you shouldn't be worried about $100 here and there.

Its so awful what people will sacrifice to own a property. Worse that our economy is 70% dependent on this spending. The money is being funneled into banks rather than the general economy.

[jasonturbo]

Once again, courtesy of Global News...

"Mainland Chinese Creating Vancouver Millionaires"

http://www.youtube.com/watch?v=YGD-NrVUwKw