The Metro Vancouver Real Estate Thread

[whatnext]

Originally Posted by Changing City

Well, there is some data on how well newly released projects are selling, although the detailed data sources are subscription services and not generally published. MLA Advisory have a fairly detailed publicly available report twice a year, and the most recent, covering the first six months of 2018, shows 74% of pre-sales released had been sold in Metro Vancouver as a whole.

There is, however, very significant variation across Metro Vancouver. 91% of the 1,573 units released for sale in 6 projects in North Burnaby sold, for example, but only 34% of the 146 units released in 2 projects in Downtown Vancouver. (Obviously there may be timing aspects to that, if they are offered closer to June than January). The reason you're seeing the White Rock project advertised may be a reflection of the fact that out of 126 units released for sale, in just one scheme - so presumably the one you referenced - only 20% had sold.

Thanks, very interesting!

With regards to resale, I found this listing in the Globe & Mail real estate pages interesting. As a snapshot it seems to indicate the various government measures are having exactly the effect voters asked for.

602 Citadel Parade, Unit 2906, Vancouver
Listing price: $848,000
Selling price: $807,000
Maintenance fees: $387.05
Taxes: $1,957.04
The sellers had bought the condo as a presale investment nearly 12 years ago. They sold because they are non-residents and didn’t want to pay the empty-homes tax, according to listing agent Ian Watt. “So they took their money elsewhere.” The buyers are a young local couple that had been looking for the past year...

The agent’s take
Sales and prices in the downtown condo market are dropping, Mr. Watt says. Comparable prices are in the $1,200-a-square-foot range, but the unit sold for $1,100 a square foot and, even then, it wasn’t an easy sell. “Lots of people came to see it, but we only got the one offer and it sold a little lower than asking. That’s the reality.”

https://www.theglobeandmail.com/real-est...mes-tax-prompts-sale-of-vancouver-condo/

[rofina]

Originally Posted by whatnext

Thanks, very interesting!

With regards to resale, I found this listing in the Globe & Mail real estate pages interesting. As a snapshot it seems to indicate the various government measures are having exactly the effect voters asked for.

602 Citadel Parade, Unit 2906, Vancouver
Listing price: $848,000
Selling price: $807,000
Maintenance fees: $387.05
Taxes: $1,957.04
The sellers had bought the condo as a presale investment nearly 12 years ago. They sold because they are non-residents and didn’t want to pay the empty-homes tax, according to listing agent Ian Watt. “So they took their money elsewhere.” The buyers are a young local couple that had been looking for the past year...

The agent’s take
Sales and prices in the downtown condo market are dropping, Mr. Watt says. Comparable prices are in the $1,200-a-square-foot range, but the unit sold for $1,100 a square foot and, even then, it wasn’t an easy sell. “Lots of people came to see it, but we only got the one offer and it sold a little lower than asking. That’s the reality.”

https://www.theglobeandmail.com/real-est...mes-tax-prompts-sale-of-vancouver-condo/

That definitely jives with that I'm seeing.

Generally people looking to move money around, but not desperately because they are sitting on so much equity.

Are they willing to go below ask to sell? Yes. Is it fire sale prices and desperation? No - no reason for panic.

Unless something drastically changes globally, I see this as a slow multi year deflation.

Over all, possibly the most positive scenario for the City, as we continue to grow our economy, without the panic of a massive RE crash, but the ability for prices to linger, or trend down for sometime.

All very positive, IMO!

Over the long term a more affordable Vancouver only becomes THAT much more appealing.

[scryer]

Originally Posted by rofina

That definitely jives with that I'm seeing.


Over all, possibly the most positive scenario for the City, as we continue to grow our economy, without the panic of a massive RE crash, but the ability for prices to linger, or trend down for sometime.

All very positive, IMO!

Over the long term a more affordable Vancouver only becomes THAT much more appealing.

Nobody is going to stick around 50 years just to buy and live in Vancouver. People have lives to live. A slow deflation will have the youth scurrying like rats to other cities. Vancouver can grow its economy but it's not going to have anyone working it unless they want to employ the elderly.

[retro_orange]

Originally Posted by scryer

Nobody is going to stick around 50 years just to buy and live in Vancouver. People have lives to live. A slow deflation will have the youth scurrying like rats to other cities. Vancouver can grow its economy but it's not going to have anyone working it unless they want to employ the elderly.

Bingo, and letting in poor foreigners to fill up suites with a bunch of bunkbeds just to fill the jobs the youth used to take isn't good planning.

[rofina]

Originally Posted by scryer

Nobody is going to stick around 50 years just to buy and live in Vancouver. People have lives to live. A slow deflation will have the youth scurrying like rats to other cities. Vancouver can grow its economy but it's not going to have anyone working it unless they want to employ the elderly.

Fundamentally I agree - but youth are willing to tough it out for a shot to stay in cities. Its the missing middle that's the bigger worry - IE, professional 30 year old's that don't want to be paying sky high for 470 square feet.

Nearly the whole of West Coast is now severely unaffordable, Vancouver might have the gold star, but most Cities are now ridiculously expensive.

I always try to make my way down to LA - its the same thing down there, different capital flows displacing people, increased homelessness, sky high rents, and property prices through the roof.

Seattle, LA, San Diego, San Fran - not cheap places to live by any stretch, and some of them offer the highest wages on the West Coast.

If I was guessing, this probably looks like the late 90's. Capital exodus after a run up, and 5-6 years of deflating prices. 20% down or so, plus benefit of inflation and wage growth.

Definitely enough incentive to make many dip their toes and buy, and probably even enough for some to move back from the arctic tundra of Alberta.

[whatnext]

How will the pre-sale registry and tax crackdown effect new development:


Property Watch: Will taxing profits from condo presales cause some projects to fold?
Oct 26, 2018

Condo presales used to be a tax-free bonanza for investors. A federal and provincial clampdown has flipped that equation..

...Presales have been highly speculative and, over the past few years, highly profitable. Buyers simply needed to put down a 5-percent deposit to secure a home, with additional deposits spread out over the span of a year. Soon, just like clockwork, prices would inflate, and they’d reap a big return.

With prices increasing 20 to 30 percent annually, and the cost of land and construction rising, many condo developers began charging more than the current market value. For buyers, it made sense to lock in the price today when it would surely be higher in a couple of years. It was a speculative gamble, but one that largely paid off—and, in some cases, created tax- free gains.

Presale buyers were getting a contract to purchase an uncompleted unit, and the only paper trail was a list held confidentially by the developer...

...That’s all about to change, and so is the presale space. As if mortgage stress tests and a slew of other federal and provincial policies designed to cool the housing market weren’t enough, the B.C. government has legislated that new developments must collect and remit the names of buyers and flippers of all presales. This move, along with condo prices trending lower, will put a damper on speculation. ..

https://www.bcbusiness.ca/Property-Watch...ndo-presales-cause-some-projects-to-fold

[misher]

Originally Posted by whatnext

How will the pre-sale registry and tax crackdown effect new development:


Property Watch: Will taxing profits from condo presales cause some projects to fold?
Oct 26, 2018

Condo presales used to be a tax-free bonanza for investors. A federal and provincial clampdown has flipped that equation..

...Presales have been highly speculative and, over the past few years, highly profitable. Buyers simply needed to put down a 5-percent deposit to secure a home, with additional deposits spread out over the span of a year. Soon, just like clockwork, prices would inflate, and they’d reap a big return.

With prices increasing 20 to 30 percent annually, and the cost of land and construction rising, many condo developers began charging more than the current market value. For buyers, it made sense to lock in the price today when it would surely be higher in a couple of years. It was a speculative gamble, but one that largely paid off—and, in some cases, created tax- free gains.

Presale buyers were getting a contract to purchase an uncompleted unit, and the only paper trail was a list held confidentially by the developer...

...That’s all about to change, and so is the presale space. As if mortgage stress tests and a slew of other federal and provincial policies designed to cool the housing market weren’t enough, the B.C. government has legislated that new developments must collect and remit the names of buyers and flippers of all presales. This move, along with condo prices trending lower, will put a damper on speculation. ..

https://www.bcbusiness.ca/Property-Watch...ndo-presales-cause-some-projects-to-fold

Tbh with prices not rising anymore due to increased mortgage rules and taxes this seems pretty late. I've talked to realtors and they said the new regulations mean its too much paperwork for them to do pre-sale flips now and most are declining them. Especially if there’s previous flips.

[GenWhy?]

Hm that could hurt the small but very profitable sector that still pushing and making lots of areas a good chunk of change still... the investor market. They're still hungry for 1 and 2-bedroom units that are small and less expensive than the "luxury" stuff that people label. Expensive doesn't mean luxury. A slow-down but not a disaster. Could provide the cooling period that rental needs. Land prices have come down and still need to, but condo prices are coming down with stuff we're working with mainly due to making the units smaller but allowing more flexible multi-use spaces (1 bed is really a convertible 2-bed). Doesn't help the fact that concrete is almost on par with wood construction though.

[whatnext]

The return of the sub-million dollar house in Vancouver:

https://globalnews.ca/news/4601772/million-dollar-house-vancouver/

[rofina]

Originally Posted by GenWhy?

Hm that could hurt the small but very profitable sector that still pushing and making lots of areas a good chunk of change still... the investor market. They're still hungry for 1 and 2-bedroom units that are small and less expensive than the "luxury" stuff that people label. Expensive doesn't mean luxury. A slow-down but not a disaster. Could provide the cooling period that rental needs. Land prices have come down and still need to, but condo prices are coming down with stuff we're working with mainly due to making the units smaller but allowing more flexible multi-use spaces (1 bed is really a convertible 2-bed). Doesn't help the fact that concrete is almost on par with wood construction though.

It will be interesting to see how long this cool off lasts.

There is plenty of new product coming to market over the next 18 months to keep a lid on things. If developers are slow to propose new projects afterwords, I can see a crunch 3-4 years down the road with not enough units in pipeline.

The response in supply is always very delayed because of planning, rezoning, etc.

The business sector is certainly thriving, I expect a lot of exciting things to come to fruition between now and 2022, that is certainly going to keep local demand strong for "affordable" units.

As for the ultra luxury Vancouver Houses, Kengo Kumas, and Butterfly's, that era is probably come to an end for sometime.

[s211]

Originally Posted by rofina

It will be interesting to see how long this cool off lasts.

There is plenty of new product coming to market over the next 18 months to keep a lid on things. If developers are slow to propose new projects afterwords, I can see a crunch 3-4 years down the road with not enough units in pipeline.

The response in supply is always very delayed because of planning, rezoning, etc.

The business sector is certainly thriving, I expect a lot of exciting things to come to fruition between now and 2022, that is certainly going to keep local demand strong for "affordable" units.

As for the ultra luxury Vancouver Houses, Kengo Kumas, and Butterfly's, that era is probably come to an end for sometime.

I wonder how the residential developers that bought lands at peak prices will be able to adjust. Some of the prices PBSF were heart-stopping.

[misher]

Originally Posted by s211

I wonder how the residential developers that bought lands at peak prices will be able to adjust. Some of the prices PBSF were heart-stopping.

If its condos then there looking at payoff in 5+ years, likely expecting the market to boom then which is expected given that our economy is expected to skyrocket once both pipelines are completed and Liberals are back in power.

If its residential houses, then probably duplex's?


A lot of arguments are going on for improving the supply side as a ton of regulations, taxes, and interest rate increases have hurt the demand side of the real estate equation. This is speaking for the COV only but many elected candidates and the mayor discussed cutting permit times, development restrictions, and possibly addressing CAC's. So while developers may sell for less if we can address the city roadblocks their profit margins may increase to cover the reduced prices.

[whatnext]

Originally Posted by misher

If its condos then there looking at payoff in 5+ years, likely expecting the market to boom then which is expected given that our economy is expected to skyrocket once both pipelines are completed and Liberals are back in power.

If its residential houses, then probably duplex's?


A lot of arguments are going on for improving the supply side as a ton of regulations, taxes, and interest rate increases have hurt the demand side of the real estate equation. This is speaking for the COV only but many elected candidates and the mayor discussed cutting permit times, development restrictions, and possibly addressing CAC's. So while developers may sell for less if we can address the city roadblocks their profit margins may increase to cover the reduced prices.

Pipelines have virtually nothing to do with employment in Vancouver.

Real estate pimpers need to adjust to two facts: 1) ultra-low interest rates are done 2) the scale of the previous outpouring of capital from China will not be seen again.

[dreambrother808]

Originally Posted by whatnext

Pipelines have virtually nothing to do with employment in Vancouver.

Real estate pimpers need to adjust to two facts: 1) ultra-low interest rates are done 2) the scale of the previous outpouring of capital from China will not be seen again.

His argument contains the odd assumption that the Liberals will unquestionably return to power in that timeframe. Then he ends his post with what his focus is show to be time and time again: developers’ profits. The majority of Vancouverites and British Columbians don’t seem to share that priority. In fact they find it’s primacy to be quite enraging, so it’s not exactly a clear lens for making any kind of predictions.

[misher]

Originally Posted by whatnext

Pipelines have virtually nothing to do with employment in Vancouver.

Real estate pimpers need to adjust to two facts: 1) ultra-low interest rates are done 2) the scale of the previous outpouring of capital from China will not be seen again.

I would say people in Vancouver would definitely be employed should the pipeline be approved. I guess you can't specify what area of BC they'll come from but you can assume a lot will come from the biggest source of labor in the region? The numbers below aren't entirely accurate but do help give some estimates.

According to Kinder Morgan’s Trans Mountain website, out of the total number of 800,000 direct, indirect and “induced person-years” of employment over 20 years of the pipeline operation estimated by the Conference Board of Canada, most will be in Alberta.

A total of 441,000 jobs would be generated and, out of those, 14,600 would be construction jobs, 13,340 are in pipeline operations, and 11,200 jobs will be generated by “dividend payments from oil producers.” Meanwhile, the company calculates another 400,600 jobs would be created “related to additional investments.

https://www.thestar.com/vancouver/2018/0...ountain-jobs-divides-bc-and-alberta.html

For 1) I agree, interest rates will not go that low again for a while if ever.
For 2) most people like to blame foreigners as there an incredibly easy target but studies have shown that they do not play that big a role in our real estate market. "Jack Favilukis, assistant professor with UBC’s Sauder School of Business, said the review found foreign buyers have only “slightly” increased the price of real estate."
https://globalnews.ca/news/3817934/forei...ncouvers-housing-prices-is-modest-study/

Btw seriously how much do you hate Chinese, its always Chinese this Chinese that with you. Logically you must know that not every non-citizen in a house isn't Chinese. Hell not even half are. A surprisingly large part of Downtown is owned by British and Persians. You remind me of this guy from Boondocks
• Video Link

[GenWhy?]

Originally Posted by misher

If its condos then there looking at payoff in 5+ years, likely expecting the market to boom then which is expected given that our economy is expected to skyrocket once both pipelines are completed and Liberals are back in power.

If its residential houses, then probably duplex's?


A lot of arguments are going on for improving the supply side as a ton of regulations, taxes, and interest rate increases have hurt the demand side of the real estate equation. This is speaking for the COV only but many elected candidates and the mayor discussed cutting permit times, development restrictions, and possibly addressing CAC's. So while developers may sell for less if we can address the city roadblocks their profit margins may increase to cover the reduced prices.

The interest rates and other mumbo-jumbo has impacted the "typical" homebuyer from going from a renter to homeowner - at the current housing prices. As land prices decrease (we've seen SF homes drop quite a bit from their inflated prices which is good for land assemblies) and condos more or less remain... we could see some condo and rental price decreases. The missing piece of the puzzle is new policy and zoning revisions.

Again investment in real estate is still seen as a good investment and safe. What you're seeing is still a good chunk of condos (let's call them mid-market) being pre-sold / bought to be largely rented out in one form or another - occupied, non-the-less. This is keeping the market where it is, especially for condos because that market can grow. SF homes are static, and an investment in them is seen as a move to rezone, assemble, etc.

[whatnext]

Originally Posted by misher

I would say people in Vancouver would definitely be employed should the pipeline be approved. I guess you can't specify what area of BC they'll come from but you can assume a lot will come from the biggest source of labor in the region? The numbers below aren't entirely accurate but do help give some estimates.

..The third myth is that the <Transmountain> project will generate significant economic gains to B.C. The project will create short-term construction jobs and about 313 permanent direct jobs in B.C., which is a positive. But the job gain is small compared with the 72,000 new jobs created in B.C. in 2016 and could be more than offset by the risk of job losses resulting from oil spills. Vancouver, for example, estimates between 3,000 and 13,000 person-years of employment could be lost due to a spill...

https://www.timescolonist.com/opinion/op...t-the-trans-mountain-pipeline-1.15051607

Originally Posted by misher

For 1) I agree, interest rates will not go that low again for a while if ever.
For 2) most people like to blame foreigners as there an incredibly easy target but studies have shown that they do not play that big a role in our real estate market. "Jack Favilukis, assistant professor with UBC’s Sauder School of Business, said the review found foreign buyers have only “slightly” increased the price of real estate."
https://globalnews.ca/news/3817934/forei...ncouvers-housing-prices-is-modest-study/

Btw seriously how much do you hate Chinese, its always Chinese this Chinese that with you. Logically you must know that not every non-citizen in a house isn't Chinese. Hell not even half are. A surprisingly large part of Downtown is owned by British and Persians. You remind me of this guy from Boondocks

You should walk around Kerrisdale sometime, apparently you are clueless about the level of Mainland Chinese investment in Vancouver real estate. I'll leave you with this quote from the "horribly xenophobic" Andy Yan:


...Yan found that buyers with “non-Anglicised Chinese names” had picked up two-thirds of 172 houses sold over a six-month period beginning in September 2014 in Vancouver’s posh west side neighbourhoods. Contrary to public perception, however, the buyers weren’t just showing up with “bags of cash” to make their buys. Some of Canada’s biggest banks were in on it. Roughly 80 per cent of the deals involved a mortgage, and half of the mortgages were held by two banks – CIBC and HSBC...

...Vancouver’s “condo king” Bob Rennie—a primary financial backer of Robertson’s NDP-tilting Vision Vancouver team and also the chief fundraiser for the NDP’s adversaries in Christy Clark’s Liberals—had cultivated a particularly brazen habit of it. “So you had these whispers about racism being used to shut down a dialogue about affordability and the kind of city we want to build here,” Andy Yan explained. “It’s a kind of moral signalling to camouflage immoral actions. It’s opportunism, and it’s a cover for the tremendous injustices that are emerging in the City of Vancouver and across the region. It’s a weird Vancouver thing. It’s very annoying. It’s kale in the smoothies or something.”.(bold mine)

https://www.macleans.ca/economy/realesta...exposed-vancouvers-real-estate-disaster/

[Migrant_Coconut]

Originally Posted by misher

I would say people in Vancouver would definitely be employed should the pipeline be approved. I guess you can't specify what area of BC they'll come from but you can assume a lot will come from the biggest source of labor in the region? The numbers below aren't entirely accurate but do help give some estimates.

From the article: "Kinder Morgan initially told the National Energy Board in 2013 the expansion would create 2,500 temporary construction jobs over two years with 90 permanent jobs. Even that number is high, Allan said, with several jobs already held by people who work on the existing pipeline."

Ninety. Nine zero. I believe that's even less than a townhome project.

Even at face value, like with Northern Gateway, half the risk for almost none of the gain (and in an industry that's on its way out) is a really bad deal for us; plenty of other projects like Site C or the Petronas plant to use those thousands of temps on.

[WarrenC12]

Originally Posted by misher

According to Kinder Morgan’s Trans Mountain website, out of the total number of 800,000 direct, indirect and “induced person-years” of employment over 20 years of the pipeline operation estimated by the Conference Board of Canada, most will be in Alberta.

A total of 441,000 jobs would be generated and, out of those, 14,600 would be construction jobs, 13,340 are in pipeline operations, and 11,200 jobs will be generated by “dividend payments from oil producers.” Meanwhile, the company calculates another 400,600 jobs would be created “related to additional investments.

LOL do you actually believe this drivel? 441 THOUSAND jobs!

"But we don't really know where over 400,000 of these will be." Give me a break.

[scryer]

If I were to speculate with no evidence to back myself up whatsoever...

Vancouver would probably make most of its money from the port fees. It's not necessarily jobs that Vancouver would capitalize on.

However I predict that a fair amount of jobs would be created in Vancouver if the pipeline does go through. I think that we will be needing to make some upgrades (both large and small) to our ports to handle the increase in ship traffic, maybe more ship pilots would be hired to accommodate the larger traffic, and I also predict that eco-scientists of various practises will be hired to properly monitor and protect the environment.... not to mention additional administrative support for all of the above. But again, these are just a shot-in-the-dark predictions.

Obviously most of the jobs are in Alberta but I think that Vancouver would attract related jobs ontop of the port fees.

Now to house these employees is another story... (back on topic)