Canada's 'housing bubble' deemed close to bursting

[dleung]

Originally Posted by casper

I am certain David Eby is well informed on the overall issue of housing. But look at his comments:
- He implies the owner as a student has no income, I don't buy it, a chartered bank is not going to loan money to someone with no income. Do you think David Eby has access to the buyers tax return to make an informed statement? Probably not.
- He implies that the previous owner did something wrong by selling to a "student". Guess what most sellers and buys never talk the realtors who broker the deal make certain of that.
- He implies the liberal government is being influenced because one of its supporters is making money on this specific sale by selling above asking. I don't think selling above asking is something that Liberal supports do and NDP supporters do not do.

What I find disturbing is the press singling out an individual in this way. I don't know either the buyer or seller. Publishing someone name in the paper and suggesting that they are doing something wrong has an impact on their reputation, relationships they have both at work and in their personal lives.

The press gets a lot of flexibility in our society but it has to act in a responsible way.

The news is for profit. We need a boogeyman to keep the rage burning. Stringing together random facts to press just the right buttons of the public conscious and to imply wrongdoing, is sloppy journalism to the point of flirting with lawsuits.

David Eby is just being a politician, counting on jealousy/resentment in his constituent base with his stupid rhetorical questions, the same way Trump owes his success to becoming the lightening rod for cynicism and hate. Of course the student can't afford the house himself; it's the rich parents. There are white trust fund babies in the exact same situation, but naming them in the papers isn't going to generate the same level of vitriol. Xenophobia is a powerful force to tap onto as long as you frame the outward discussion in more politically-correct terms.

[ssiguy]

Those were interesting videos, thanks.

One thing stands out is how Mayor Robertson completely abdicates any responsibility for the situation. All he did was say all the things he can't do and Victoria and/or Ottawa can. While it is true that a lot of the blame can be placed at their feet, the biggest issue is a City one..........allowing the destruction of homes and being able to replace those homes with another SFH.

As I stated earlier that $2 million dump on the Westside would sell for a mere fraction of that price {as would thousands of other homes waiting for the wrecking ball} if they couldn't be torn down and replaced with another SFH.

[ssiguy]

An interesting comment came from the real estate agent who said as people see their neighbourhoods hollowed out they eventually decide to sell as there is nothing left for them.

My brother recently sold and a woman around the block has a very nice house off Cresent Road in SS and the cul-de-sac had 6 homes but now 5 have been sold and yet only one is lived in part-time. In other words the neighbourhood is gone and she feels isolated and afraid to walk at night. She told my brother she may soon sell as well as now there is nothing left for her to make her stay..........exactly what the real estate agent mentioned.

[Stingray2004]

Originally Posted by ssiguy

My brother recently sold and a woman around the block has a very nice house off Cresent Road in SS and the cul-de-sac had 6 homes but now 5 have been sold and yet only one is lived in part-time. In other words the neighbourhood is gone and she feels isolated and afraid to walk at night. She told my brother she may soon sell as well as now there is nothing left for her to make her stay..........exactly what the real estate agent mentioned.

OK. I know many folk that reside along Crescent Road all the way to Crescent Beach (where my li'l sis resides BTW.). The only cul-de-sac, that I am familiar with, along that entire route comprises 7 SFDs at 130 St. Is that the one? If not, which other "cul-de-sac" along Crescent Road are you talking about? Kindly provide the exact street/address.

Why? I wanna check this "fact" out for myself!!!

PS. I know of one Taiwanese family that purchased an SFD about 4 years ago just off 142A St. and Crescent Rd. He's back and forth between Taiwan and SS quite oft. Different kettle of fish.

PPS. If you cannot provide a street/address (which I suspect that ya can't)... then ya are obviously engaged in just more of your "celebrity gossip" TMV stuff again.

[lio45]

Originally Posted by ssiguy

Those were interesting videos, thanks.

One thing stands out is how Mayor Robertson completely abdicates any responsibility for the situation. All he did was say all the things he can't do and Victoria and/or Ottawa can. While it is true that a lot of the blame can be placed at their feet, the biggest issue is a City one..........allowing the destruction of homes and being able to replace those homes with another SFH.

As I stated earlier that $2 million dump on the Westside would sell for a mere fraction of that price {as would thousands of other homes waiting for the wrecking ball} if they couldn't be torn down and replaced with another SFH.

Trust me, from experience, it doesn't work like that at all.

If the one and only thing standing between a $200,000 property and a $2 million empty buildable lot zoned for a SFH is an eminently flammable old wooden shack, it's most definitely not going to suffice.

It doesn't work in a normal market like Sherbrooke, imagine how far it would be from working in a market like Van where the buyers in general are much less scrupulous and the realtors too (that Chinese realtor with leg-breaking connections, you really think she can't find someone to start a fire?)

[whatnext]

Originally Posted by dleung

The news is for profit. We need a boogeyman to keep the rage burning. Stringing together random facts to press just the right buttons of the public conscious and to imply wrongdoing, is sloppy journalism to the point of flirting with lawsuits.

David Eby is just being a politician, counting on jealousy/resentment in his constituent base with his stupid rhetorical questions, the same way Trump owes his success to becoming the lightening rod for cynicism and hate. Of course the student can't afford the house himself; it's the rich parents. There are white trust fund babies in the exact same situation, but naming them in the papers isn't going to generate the same level of vitriol. Xenophobia is a powerful force to tap onto as long as you frame the outward discussion in more politically-correct terms.

You seem to vacillate between "foreign ownership isn't a problem" to "maybe it's a problem but we shouldn't talk about it". The irony is I know several second gen HK immigrants who are getting walloped by the effects of Mainland Chinese money driving up prices. They're working and living on Vancouver wages and can't afford a place. What seemed like a lot of money in the 'Nineties can't compete with what you can accumulate in a corrupt kleptocracy.

[someone123]

Originally Posted by lio45

Trust me, from experience, it doesn't work like that at all.

If the one and only thing standing between a $200,000 property and a $2 million empty buildable lot zoned for a SFH is an eminently flammable old wooden shack, it's most definitely not going to suffice.

It doesn't work in a normal market like Sherbrooke, imagine how far it would be from working in a market like Van where the buyers in general are much less scrupulous and the realtors too (that Chinese realtor with leg-breaking connections, you really think she can't find someone to start a fire?)

Well, really, if city intended to preserve the shacks, the rule would be that if you burned down the shack you would have to rebuild it to the city's satisfaction. And if you didn't rebuild it they would rebuild it for you, send you the bill, and file a lien on your property.

I'm not sure why you would want to preserve the shacks though (assuming we're not talking about heritage buildings with public value). The fact that they're being replaced with nicer homes isn't what people are upset about. Actually I would say that a lot of the housing stock in Vancouver's older neighbourhoods is quite crappy and not worth preserving.

[eternallyme]

I'm starting to feel like, if this housing mess does not stop, it may drive more and more of Canada's younger people out of the country, presumably mostly to the United States, where they can make higher salaries and pay a fraction of the cost for their homes.

[1overcosc]

Originally Posted by eternallyme

I'm starting to feel like, if this housing mess does not stop, it may drive more and more of Canada's younger people out of the country, presumably mostly to the United States, where they can make higher salaries and pay a fraction of the cost for their homes.

This only works for people who are able to land good jobs in the US. Many underemployed youth are in no position to do so.

[someone123]

Originally Posted by 1overcosc

This only works for people who are able to land good jobs in the US. Many underemployed youth are in no position to do so.

For the young professionals who do make six figure salaries though my completely unscientific impression is that there's quite a bit of brain drain happening. This is the cohort that would have produced the greatest dividends for the city and province over the long run.

I probably wouldn't have stayed here had I not had personal connections to the city. I am also perfectly happy living in an apartment or condo. I don't have or want kids. If I did that would be a factor pushing me out. It's hard to find reasonably spacious housing units here suitable for more than two people.

For those with lower paying jobs Vancouver isn't actually that bad. Rents here are affordable compared to a lot of US cities and when you add in social benefits the standard of living is probably somewhat higher. Other necessities like food seem pretty cheap here too, at least compared to other parts of Canada.

Vancouver's also a bit of a party or resort town where rich kids congregate. It's not New York but you run into a lot of people here who can only afford this place because their parents are footing the bill.

[lio45]

Originally Posted by someone123

Well, really, if city intended to preserve the shacks, the rule would be that if you burned down the shack you would have to rebuild it to the city's satisfaction. And if you didn't rebuild it they would rebuild it for you, send you the bill, and file a lien on your property.

Yeah, and rebuilding a much nicer, much tastier, much bigger house would certainly be expected to qualify as a satisfactory rebuild...

It would be total nonsense for the City to force the rebuilding of shittier housing stock (and less dense, as well) than what the private sector would naturally want to do.

I'm not sure why you would want to preserve the shacks though (assuming we're not talking about heritage buildings with public value). The fact that they're being replaced with nicer homes isn't what people are upset about.

His idea was to try to cool off the market by outlawing the replacement of older homes / "teardowns". But as I said, it would never work in practice.

Actually I would say that a lot of the housing stock in Vancouver's older neighbourhoods is quite crappy and not worth preserving.

Agreed.

[lio45]

Originally Posted by someone123

I don't have or want kids. If I did that would be a factor pushing me out. It's hard to find reasonably spacious housing units here suitable for more than two people.

I saw a few articles already pointing out that one's first echography report is basically one's Vancouver eviction notice. I don't doubt it.

If you want to remain a renter forever, Vancouver works fine, but I'm guessing it will suck to be looking at your cousins and your friends from school all amassing property and building up their retirement fund over time due to paying it off, some of them even likely doing so with jobs inferior to yours. Maybe not while still young, but eventually, it's likely to happen for most people, I'd imagine.

[kwoldtimer]

In the category, perhaps, of exceptions making the rule, I enjoyed this report about a Chinese billiionare undertaking a massive renovation of an historic Vancouver mansion. Seems like a real labour of love.

http://www.cbc.ca/news/canada/british-columbia/heritage-shaughnessy-property-1.3615126

[someone123]

Originally Posted by lio45

If you want to remain a renter forever, Vancouver works fine, but I'm guessing it will suck to be looking at your cousins and your friends from school all amassing property and building up their retirement fund over time due to paying it off, some of them even likely doing so with jobs inferior to yours. Maybe not while still young, but eventually, it's likely to happen for most people, I'd imagine.

I've said that I am not really interested in buying a house because I'm too busy and can't be bothered managing the upkeep, but I can understand why you'd want to own your condo instead of renting. I'm in a condo and we've made some modifications to customize it in a way I never would have bothered to do in an apartment. Renting an apartment can be very unstable.

Putting down roots as a renter seems less desirable in that you have less control over what's going to happen. There are rent controls but you can still lose your apartment for one reason or another and you could find yourself priced out of the city you've lived in for decades. Given this city's real estate bubble and subpar planning practices/infrastructure (almost any distance results in a bad commute) I don't find it hard to imagine being stuck with really miserable housing options.

[someone123]

Originally Posted by lio45

Yeah, and rebuilding a much nicer, much tastier, much bigger house would certainly be expected to qualify as a satisfactory rebuild...

No, you would force them to reproduce the old building in terms of square footage and appearance. You could even force them to try to rebuild it in an impractal way, replicating the original construction (go buy authentic 1930's newspapers for insulation, in the rare event that there was any insulation?).

If there's one thing city bureaucracies can do, it's put up nonsense roadblocks like this. I am fully confident that if the will were there the city would be capable of harassing real estate investors/speculators until they gave up and left.

Like I said I still think this is a wasteful way to go though. And more significantly this isn't going to happen because a lot of people want to keep this gravy train going. If it stops it will stop because it has derailed and exploded, not because it has been safely slowed down.

[casper]

Originally Posted by lio45

I saw a few articles already pointing out that one's first echography report is basically one's Vancouver eviction notice. I don't doubt it.

If you want to remain a renter forever, Vancouver works fine, but I'm guessing it will suck to be looking at your cousins and your friends from school all amassing property and building up their retirement fund over time due to paying it off, some of them even likely doing so with jobs inferior to yours. Maybe not while still young, but eventually, it's likely to happen for most people, I'd imagine.

The assumption there is owning property is a good investment. Clearly that has been the case in Vancouver. It has not been the case in many markets in Canada or the US. A good stock portfolio can be equally as beneficial especially with TFSA and RRSP tax treatment.

[cornholio]

Originally Posted by casper

The assumption there is owning property is a good investment. Clearly that has been the case in Vancouver. It has not been the case in many markets in Canada or the US. A good stock portfolio can be equally as beneficial especially with TFSA and RRSP tax treatment.

Owning your own home in Canada is almost a necessity for the middle class going into retirement. That's because it is subsidized in various ways. Not owning means your housing costs going into retirement are going to be about 500 to 1000% greater and that's assuming you don't deffer your property taxes at the 1% interest rate. If you rent you are not only guaranteed to pay 500 to 1000% more for housing when you retire (and have a finite income) but the money you direct towards rent is your income, and your income is taxed. Without owning and being in the middle class you are all but guaranteed to have a pretty shitty retirement, and with life expectancies nearing 90 that's nearly half your life living on the edge in your most vulnerable years.

Housing is not just a investment. Its your shelter. Paying 500 to 1000% more for your shelter makes a pretty big difference to a person with a middle class pension.

[geotag277]

Would be interesting to run some actual numbers on this. Paying rent indefinitely is of course a huge expense, but so is home ownership and maintenance. They both have significant line items under expenditures over the long term, and with the money saved from renting being invested in appreciating assets, I don't think it is so obvious that owing a home is financially the best move. Outside of the utility the investment historically hasn't been anything to write home about, versus, say, dollar cost averaging the S&P over your income earning years which would be likely to make you wealthy.

[csbvan]

Originally Posted by someone123

Well, really, if city intended to preserve the shacks, the rule would be that if you burned down the shack you would have to rebuild it to the city's satisfaction. And if you didn't rebuild it they would rebuild it for you, send you the bill, and file a lien on your property.

I'm not sure why you would want to preserve the shacks though (assuming we're not talking about heritage buildings with public value). The fact that they're being replaced with nicer homes isn't what people are upset about. Actually I would say that a lot of the housing stock in Vancouver's older neighbourhoods is quite crappy and not worth preserving.

Most of the housing stock in Vancouver's old neighbourhoods are craftsman style homes, and most fit in well with the overgrown, leafy streets that they line. In fact quite worth preserving. They are old, established neighbourhoods that give the city it's identity, unlike tacky monster homes covered in tiles that look nothing like homes that have been built in Vancouver over the years and in fact belong on a some junky golf course outside of Vegas.

[cornholio]

Originally Posted by geotag277

Would be interesting to run some actual numbers on this. Paying rent indefinitely is of course a huge expense, but so is home ownership and maintenance. They both have significant line items under expenditures over the long term, and with the money saved from renting being invested in appreciating assets, I don't think it is so obvious that owing a home is financially the best move. Outside of the utility the investment historically hasn't been anything to write home about, versus, say, dollar cost averaging the S&P over your income earning years which would be likely to make you wealthy.

Sure but your investments and RRSP's get taxed when withdrawn during retirement as income (with the exception of TFSA which has a fairly small contribution limit). Rent is a major expense.

having said that this could and at this rate should change. That means more money being directed towards subsidized housing for the middle class and stricter rent controls that protect renters, like in most European countries. You can even it out. Right now it is most definitely not even. Right now if you don't own when you retire you are guaranteed to be on the edge. If you own and have a decent pension you should be living a pretty good life without having to raide your equity.