The Metro Vancouver Real Estate Thread

[SpongeG]

It's not just sky-high home prices that make Vancouver so unaffordable — it's paltry wages, too

The average household in Vancouver earns the equivalent of US$61,036 a year — less than families in Nebraska, Missouri and rural Pennsylvania

Bloomberg News
Natalie Obiko Pearson
July 13, 2018

Want to pay San Francisco housing prices on a Columbus, Ohio income? Move to Vancouver.

While policymakers from Seattle to Boston lament a growing urban affordability crisis, a new study of home prices and earnings across more than 100 major U.S. and Canadian metropolitan areas shows Vancouver in an ignominious class of its own.

The median cost of a Vancouver home, adjusted for purchasing power parity, is US$672,000 — costly but still 15 per cent to 26 per cent below that of San Jose and San Francisco, the two most expensive housing markets, according to Andy Yan, director of Simon Fraser University’s City Program, whose study accounted for the difference in buying power of a dollar across geographies and currencies.

...

https://business.financialpost.com/real-...ver-so-unaffordable-its-paltry-wages-too

[GenWhy?]

Originally Posted by rofina

Because you still have to include bathroom and kitchen and the utilities to go along with them.

The cost to build and extra bedroom is a fraction of that to build an extra bathroom.

You take those costs and divide by a smaller unit square footage and your PSF cost are higher on studios than 3 bedroom units.

100 square feet on a unit can cost a person almost 200-300k. If we can shave off any sq on ay units it makes a unit less expensive but it can remain marketed as a 1 or 2-bed, for instance. With the prices that control our market, there are only so many 2 and 3 bedroom units we can sell. We opt for smaller units because they're more easily digestible in the market.

[s211]

It would be much simpler if one would speak either absolute dollars or $psf, and not use the two somehow interchangeably. It would allay a lot of confusion.

[rofina]

Originally Posted by GenWhy?

100 square feet on a unit can cost a person almost 200-300k. If we can shave off any sq on ay units it makes a unit less expensive but it can remain marketed as a 1 or 2-bed, for instance. With the prices that control our market, there are only so many 2 and 3 bedroom units we can sell. We opt for smaller units because they're more easily digestible in the market.

This isn't what I was speaking to.

I understand that more space costs more in absolute terms.

However.

If you look at unit costs, divided by unit square footage, IE; per square foot cost, you will find that smaller units cost more PSF.

Studios being most pricey.

No different than a rancher being more expensive PSF versus a 2 story home. Even though the rancher will be cheaper to build.

[rofina]

Originally Posted by GenWhy?

We are doing 2-beds for 1,000sf and 1-beds at 600sf. The thing is that everything has a price depending on location, views, materials, land costs. Want a central(ish) located 2-bed at 1,080 sf in a concrete building built in the last 3 years? You'll have to pay what the market demands... which is I think 1.4 million? Which economically on our end is relatively low.

Construction costs - and especially concrete - and land go up monthly and we have a hard time keeping up. The smaller the unit, the lower the price.

I'm not disputing any of what you're saying.

I understand the logic behind smaller units. Its no different in food prices, you pay the same, get less, and everyone says things aren't getting more expensive because a $2 candy bar is still $2 but you actually get a 25% less.

I also understand price pressures - concrete, steel, etc. Hard to secure costs when you have X factors like 30% tariffs looming.

Which brings me to my most repeated point on these boards - without a single doubt, building high-rise units will absolutely never yield us affordable units of a liveable square footage.

The input costs are just too high.

The only solution is what currently proposed by council. Rezone all the RS lots to allow more densely configured, ground oriented housing.

Town homes, stacked town homes, row homes, etc.

[whatnext]

Originally Posted by GenWhy?

We are doing 2-beds for 1,000sf and 1-beds at 600sf. The thing is that everything has a price depending on location, views, materials, land costs. Want a central(ish) located 2-bed at 1,080 sf in a concrete building built in the last 3 years? You'll have to pay what the market demands... which is I think 1.4 million? Which economically on our end is relatively low.

Construction costs - and especially concrete - and land go up monthly and we have a hard time keeping up. The smaller the unit, the lower the price.

Let's just think about that for a moment.

How ridiculous is it that a new 2 bed condo now costs as much as the nicest home in East Van five years ago, or a nice character home on the West Side ten year ago.

That's why the whole "build our way to affordability" thing is rubbish. It can't be done if there is a tsunami of foreign demand.

[CanSpice]

Originally Posted by whatnext

Let's just think about that for a moment.

How ridiculous is it that a new 2 bed condo now costs as much as the nicest home in East Van five years ago, or a nice character home on the West Side ten year ago.

That's why the whole "build our way to affordability" thing is rubbish. It can't be done if there is a tsunami of foreign demand.

So then we don't build? How is that supposed to help?

Even if we had zero money coming from outside of Canada (or even BC) prices would still rise, we would still have people moving here, and there would still be a housing crisis. Ban foreign investment all you want, but we still need to build because of population pressures.

[svlt]

Think he meant that it can't be solely relied upon as the solution, i.e. a hundred more condo towers alone wouldn't alleviate the problem.
But more supply quite logically will assuage demand.

[rofina]

Originally Posted by CanSpice

So then we don't build? How is that supposed to help?

Even if we had zero money coming from outside of Canada (or even BC) prices would still rise, we would still have people moving here, and there would still be a housing crisis. Ban foreign investment all you want, but we still need to build because of population pressures.

Its a question of what and how we build.

Codes and regulations make new building absurdly expensive.

Not holding my breath for a regulation rollback, but its a giant part of the cost increases here.

Zoning is also to blame. We have thousands of SFH sitting within walking distance of our Downtown core.

Any City serious about handling a housing crisis would not have half acre SFH lots within walking distance of Downtown.

Finally build form - high rise is expensive to design, engineer and build. In addition the amount of floor space dedicated to common areas, elevator shafts, emergency stairs, etc, is a giant portion of buildings floor plates - not usable space.
With towers like Trump its the majority of the floor plate.

[GenWhy?]

Originally Posted by rofina

Its a question of what and how we build.

Codes and regulations make new building absurdly expensive.

Not holding my breath for a regulation rollback, but its a giant part of the cost increases here.

Zoning is also to blame. We have thousands of SFH sitting within walking distance of our Downtown core.

Any City serious about handling a housing crisis would not have half acre SFH lots within walking distance of Downtown.

Finally build form - high rise is expensive to design, engineer and build. In addition the amount of floor space dedicated to common areas, elevator shafts, emergency stairs, etc, is a giant portion of buildings floor plates - not usable space.
With towers like Trump its the majority of the floor plate.

Code and regulation (by-law?) is a giant part of the cost increase? How so? If by regulation you mean by-law, I can understand that more, but less on the Code aspect.

[rofina]

Originally Posted by GenWhy?

Code and regulation (by-law?) is a giant part of the cost increase? How so? If by regulation you mean by-law, I can understand that more, but less on the Code aspect.

BC Building Code is definitely gotten more onerous. By-Laws and engineer requirements even more so.

Houses used to be nailed together without a single joist hanger, framed up in a matter of a day or two. Most still stand strong and dry - take a look at the West Side.

Today you have steel strapping, sheer walls, hurricane ties, rain screen strapping, 2/8 exterior framing, etc, etc.

And that's only at the framing stage.

You went from putting up a house with roof in a matter of days, to a matter of months. Of course that comes with cost implications.

The same, but more so, applies to high rise and commercial properties. ASHREA, LEED, Seismic, etc.

[ssiguy]

A massive housing collapse is what Vancouver needs and will be the only solution to our rental crisis.

Metro Vancouver is not growing very quickly. Quite the opposite it is one of the slowest growing Metros in the country, so why the rental shortage. There are several reasons like AirBnb, empty condos etc but the real culprit is our astronomical real estate prices.

In every other city in the country, people making a standard wage comparable to Vancouver can buy a house or at a minimum townhome or condo but in Vancouver they can`t. In other words, people with decent jobs are forced to stay in the rental market while in other cities they would have bought a home and gotten out of the rental market. The city can plan to build tons of new low income rentals but it will only make a small dent in the problem.

Vancouver`s sky-high real estate has not only hurt potential homeowners but also crippled the rental market which is why so many live in small and substandard acconodation........they can`t afford anything else because they are competing with higher incone people.

[connect2source]

*delete* incorrect thread

[whatnext]

Great to see more tools to help crackdown on condo owners flouting strata laws on AirBnB etc:

Homeowners groups in British Columbia will soon be able to fine owners or residents up to $1,000 a day for defying the corporation’s bylaws on short-term rentals.

The B.C. government says the regulations for the so-called strata corporations will be changed as of Nov. 30 to help the associations address short-term rentals, such as those arranged through Airbnb and other vacation websites.

Housing Minister Selina Robinson says in a news release that it’s common to hear stories of long-term renters losing their homes when units are pulled out of the market to be used as short-term rentals...

https://business.financialpost.com/real-...ne-defiant-airbnb-hosts-up-to-1000-a-day

[whatnext]

Pre-sale condo sales plummet in Greater Vancouver. See ya' speculators and money launderers!

The rate at which presale condos and townhomes are being snapped up has plummeted across Greater Vancouver and the Fraser Valley – especially in downtown Vancouver, according to a July 18 report by a real estate marketing company.

MLA Advisory, the research arm of marketing firm MLA Canada, said in its mid-year report that the absorption rate of newly released presale units in June 2018 across the Lower Mainland was just 50 per cent, compared with 94 per cent in January this year. The monthly absorption rate is the proportion of units that are both released and sold within that month....

http://www.vancourier.com/real-estate/new-home-presales-plummet-in-lower-mainland-1.23372644

[misher]

Originally Posted by whatnext

Pre-sale condo sales plummet in Greater Vancouver. See ya' speculators and money launderers!

The rate at which presale condos and townhomes are being snapped up has plummeted across Greater Vancouver and the Fraser Valley – especially in downtown Vancouver, according to a July 18 report by a real estate marketing company.

MLA Advisory, the research arm of marketing firm MLA Canada, said in its mid-year report that the absorption rate of newly released presale units in June 2018 across the Lower Mainland was just 50 per cent, compared with 94 per cent in January this year. The monthly absorption rate is the proportion of units that are both released and sold within that month....

http://www.vancourier.com/real-estate/new-home-presales-plummet-in-lower-mainland-1.23372644

Its unfortunate that propaganda has convinced the masses to support policies that are pushing us towards a recession. One example is money laundering, the NDP would tell you its bad to allow them to invest here....but in reality they just take the money somewhere else and there goes the jobs and taxes that that money would create. Another is speculation. For some reason people who buy housing as an investment are now evil, while people who buy stocks are ok. People who buy investment property generally rent it out, helping to solve the housing crisis. Their money also creates jobs, pays taxes, and helps support the real estate industry. The high costs of construction and land in Vancouver require speculation in order to push the construction of housing.

You need to understand that should the real estate industry crash (as many are hoping) we will lose a ton of jobs, a ton of taxes (goodbye all the social programs), and developers will stop building new housing. Wanting the real estate industry to crash either because you want a cheaper home or because the misery of those that own homes makes you happy is very short-sighted (which is exact what the NDP stands for).

This is coming from someone born in Vancouver with little family support who doesn't own housing. However working in an industry that relies on a strong real estate industry+a business degree helps give me some insight that is missed by others. Tbh rent is still pretty cheap in Vancouver and rental protection laws are very strong. Killing the real estate industry is just going to decrease the rental supply.

[misher]

Originally Posted by rofina

BC Building Code is definitely gotten more onerous. By-Laws and engineer requirements even more so.

Houses used to be nailed together without a single joist hanger, framed up in a matter of a day or two. Most still stand strong and dry - take a look at the West Side.

Today you have steel strapping, sheer walls, hurricane ties, rain screen strapping, 2/8 exterior framing, etc, etc.

And that's only at the framing stage.

You went from putting up a house with roof in a matter of days, to a matter of months. Of course that comes with cost implications.

The same, but more so, applies to high rise and commercial properties. ASHREA, LEED, Seismic, etc.

Agreed Vancouver requires a permit for taking down a dead tree, opening a wall, a ton of stupid things. Vancouver has literally added rules ontop of rules ontop of rules. And funnily enough, they've made a ton of mistakes by requiring certain things that they later realized were dumb. They generally jump onto the newest technology without considering how practical it will be in our weather long-term. Also Vancouver charges around $300-$800 a sqft in taxes, contributions, etc. which is partially why new condos cost so much. Our government has always been two faced, blaming others while doing their best to sustain the problem

[Klazu]

Originally Posted by GenWhy?

We are doing 2-beds for 1,000sf and 1-beds at 600sf.

For the past five years, most new 2 bedroom units have been 700-850 sqft in size. Even a lot of the 3 bedroom condo units have become under 1,000 sqft. It's a joke how small and bad quality everything new is, and it still costs between 1-2 million dollars.

Originally Posted by misher

You need to understand that should the real estate industry crash (as many are hoping) we will lose a ton of jobs, a ton of taxes (goodbye all the social programs), and developers will stop building new housing. Wanting the real estate industry to crash either because you want a cheaper home or because the misery of those that own homes makes you happy is very short-sighted (which is exact what the NDP stands for).

Most jobs lost would be in construction and it would send all the out-of-province workers back home. Sure, it would have a significant impact in a economy that is almost purely driven by speculative real estate market, but I am sure the impact is also exaggerated.

If the market would really crash (prices would come down 50%) that would get a lot of people, like myself, to start thinking about buying. I believe the market could actually become even more active than it is today, as the silent majority is waiting for this craziness to play out.

Should that happen, I would not enjoy from people losing money, but anyone that has bough in the last 5 years has been 100% aware of the huge risk they are betting on not happening. All the signs have been there for years, so one can only blame himself should things default.

Originally Posted by misher

Tbh rent is still pretty cheap in Vancouver and rental protection laws are very strong. Killing the real estate industry is just going to decrease the rental supply.

I don't think you are renting yourself or have not been in the market for years. Have a look at Craigslist and tell me that what is being rented out is cheap? Even moldy Vancouver Specials from the 70s are renting for $2,500+...

[whatnext]

The real estate industry continues to skirt around money laundering or taking compliance with regulations seriously:

B.C. Attorney General David Eby says he is troubled by the continued lack of compliance with anti-money-laundering controls at B.C. real estate firms revealed in the latest deficiency reports.

According to figures obtained by Postmedia News, and reported Monday, Canada’s financial intelligence watchdog found “significant” and “very significant” deficiencies in the money-laundering controls at 88 per cent of 130 real estate entities they examined in B.C. over the last two years.

The companies were not identified by name.

The finding was similar to one made two years earlier when the watchdog, the Financial Transactions and Reports Analysis Centre of Canada or Fintrac, conducted 79 examinations in B.C.’s real estate sector, uncovering 71 companies — or 89 per cent — with “significant or very significant” deficiencies.

The heads of the Real Estate Council of B.C. and of the B.C. Real Estate Association said they supported Fintrac efforts, but couldn’t say if real estate companies have tightened their controls...

https://theprovince.com/business/local-b...37-a5c9-2fc8035c1bdd?video_autoplay=true

[whatnext]

That hissing noise you hear is the deflating Vancouver real estate bubble:

The Vancouver condo market continued to slow in July. While part of this is seasonal a trend, there’s definitely more to it this time around. Condo sales have declined each month this year, and fell to their lowest total for the month in six years.

Overall, Vancouver condo sales declined by 22% on a year over year basis. The one bedroom condo space remained the strongest, but was not immune, with sales dropping 19%. Two bedroom condo sales dipped 24%, while three bedroom sales plunged by 31%. For further context, the 427 condo sales this month was 20% below the ten year average for July...

http://vancitycondoguide.com/vancouver-condo-sales-july/