The real problem with Vancouver’s outrageous house prices

[whatnext]

Just heard of another project "postponed", the project on the Ryerson Church property in Kerrisdale.

[retro_orange]

Top-selling Vancouver realtor's licence cancelled after allegedly doing business while under suspension

A top-selling Vancouver realtor who allegedly failed to cease his activities while under a one-year licence suspension for lies and deceptive practices has had his licence cancelled after The Province investigated his case and forwarded evidence to the Real Estate Council of B.C.

The council had suspended Yu-Hsiang (Lester) Lin’s licence in September 2015 after he admitted to a number of allegations in a 2011 Burnaby home sale in which he misled a buyer into grossly overbidding.

The council found that the buyer made a subject-free offer for $1.08 million — $181,000 above the home’s list price — based on the realtor’s deceptive actions.

Among a number of breaches, Lin was found guilty of lying when he told the buyer that there were multiple offers for the property including a bid for $1.1 million, and failing to disclose to the buyer that the property had a significant easement.

Furthermore — in 2013 while under investigation and still leading his region in sales — Lin tried to cover up by repeatedly lying to the council and maintaining there were multiple offers in the 2011 case. He also caused an assistant to fabricate evidence provided to the council.

Under Lin’s suspension he was to take down all his advertising in September 2015. But a new brokerage, Lester Lin Realty, was set up.

According to evidence obtained by The Province, Lin’s previous ads were replaced in September with Lester Lin Realty ads that contained his name and the words “your local expert” and a number of connections to his previous brokerage. The appearance was that the new company was relying on the sales record, reputation, image and business connections of the suspended realtor.

Prior to his suspension, Lin had advertised his connections to Mainland China as an advantage in a market he said was dominated by Chinese buyers. He was in the top one per cent of Vancouver MLS realtors and was the region’s top seller in 2013, according to an MLS award currently posted to Lin’s Twitter account.

In late December, several months after The Province forwarded evidence and questioned the council about Lin’s case, the council announced a new ruling against Lin.

“The council has cancelled the real estate licence of Yu-Hsiang (Lester) Lin of Burnaby, effective immediately,” a statement said. “In addition, the council has issued an order requiring the brokerage Lester Lin Realty, Vancouver, and its managing broker … to immediately cease permitting Mr. Lin from holding himself out as a licensee or an unlicensed assistant associated with the brokerage.”

The brokerage was further ordered to ensure its licensees are properly supervised.

The Province has found that online searches for the realtor Lester Lin lead to an “under construction” Lester Lin Realty website that lists the same phone number seen in bus-stop ad pictures forwarded to the council by The Province in September, and an email address.

Last week a reporter called the number and asked a receptionist if Lester Lin’s real estate website should be shown, and she replied “it should not be.”

She provided a phone number for Lester Lin. In Chinese and heavily accented English, Lin’s phone message asked for callers to leave messages. In a phone message The Province asked Lin to answer some questions for this story, but he did not respond.

https://theprovince.com/news/local-news/...ly-doing-business-while-under-suspension

[Changing City]

Here's a project that will test the current market demand: Monument at Larch on West Broadway; 22 homes in a 4 storey building.

2nd Floor, 2 bed + 2 bath + Flex, 1,170 SF, $1,689,900
2nd Floor, 1 bed + 1 bath + Flex, 720 SF, $979,900
3rd Floor, 2 bed + 2 bath + Flex, 1,345 SF, $1,999,900
Penthouse, 3 bed + 2 bath + Flex, 1,400 SF, $2,599,900
Townhouse 1 bed + 1.5 bath + Flex, 895 SF, $1,199,900


image - Vancouvernewcondos

[whatnext]

Originally Posted by Changing City

Here's a project that will test the current market demand: Monument at Larch on West Broadway; 22 homes in a 4 storey building.

2nd Floor, 2 bed + 2 bath + Flex, 1,170 SF, $1,689,900
2nd Floor, 1 bed + 1 bath + Flex, 720 SF, $979,900
3rd Floor, 2 bed + 2 bath + Flex, 1,345 SF, $1,999,900
Penthouse, 3 bed + 2 bath + Flex, 1,400 SF, $2,599,900
Townhouse 1 bed + 1.5 bath + Flex, 895 SF, $1,199,900


image - Vancouvernewcondos

LOL, $2.7 million for a penthouse in essentially a "four story walk-up" right on Broadway.

Epta Properties has some interesting history:
https://thebreaker.news/news/legion-versus-lawyer/

[nds88]

https://www.vancouverisawesome.com/2019/05/13/vancouver-real-estate-expensive-markets/

On a per square foot basis, Vancouver is relatively cheap. The article only evaluated 11 selected cities. If this were expanded, there will be several more cities more expensive. I believe Tel Aviv, Beijing, Shanghai, Amsterdam, Stockholm, Moscow and several other European and Asian cities cost way more that Vancouver.

[giallo]

Originally Posted by whatnext

LOL, $2.7 million for a penthouse in essentially a "four story walk-up" right on Broadway.

Epta Properties has some interesting history:
https://thebreaker.news/news/legion-versus-lawyer/

Funny. I thought low-rise infill was supposed to be cheaper to build, and therefore, cheaper to buy. These prices are no different than a 35fl downtown high-rise tower.

A million bucks for a one bedroom on the second floor with no view. Hmmm.

[scryer]

Originally Posted by giallo

Funny. I thought low-rise infill was supposed to be cheaper to build, and therefore, cheaper to buy. These prices are no different than a 35fl downtown high-rise tower.

A million bucks for a one bedroom on the second floor with no view. Hmmm.

I agree. This is beyond reality. And who the fuck would actually buy 2nd floor "penthouses" for a million? Housewives and students?

[misher]

Originally Posted by scryer

I agree. This is beyond reality. And who the fuck would actually buy 2nd floor "penthouses" for a million? Housewives and students?

Fairview there’s a lot of retirees and young nouveau rich who do so.

[GenWhy?]

Originally Posted by giallo

Funny. I thought low-rise infill was supposed to be cheaper to build, and therefore, cheaper to buy. These prices are no different than a 35fl downtown high-rise tower.

A million bucks for a one bedroom on the second floor with no view. Hmmm.

If it's made out of wood and not in that location.

[Hmoob]

Originally Posted by giallo

Funny. I thought low-rise infill was supposed to be cheaper to build, and therefore, cheaper to buy. These prices are no different than a 35fl downtown high-rise tower.

A million bucks for a one bedroom on the second floor with no view. Hmmm.

Condo pricing doesn't work that way. Developers, like most people, want to make as much money as they can. They sell at the highest price the market will bear. Cheaper to build just means the developer makes more money.

Lower construction costs can contribute to lower sale price through indirect economic mechanisms, but that won't be immediately observable or show up in the price of a single low-cost project.

[misher]

Originally Posted by Hmoob

Condo pricing doesn't work that way. Developers, like most people, want to make as much money as they can. They sell at the highest price the market will bear. Cheaper to build just means the developer makes more money.

Lower construction costs can contribute to lower sale price through indirect economic mechanisms, but that won't be immediately observable or show up in the price of a single low-cost project.

Taxes and extra costs always get passed onto the consumer. Lower costs means developers will build more and prices will fall. Where in Canada has the highest development costs? And where in Canada has the highest prices? The correlation makes this obvious.

[whatnext]

Originally Posted by Hmoob

Condo pricing doesn't work that way. Developers, like most people, want to make as much money as they can. They sell at the highest price the market will bear. Cheaper to build just means the developer makes more money.

Lower construction costs can contribute to lower sale price through indirect economic mechanisms, but that won't be immediately observable or show up in the price of a single low-cost project.

I believe the point being made is that the developer drastically miscalculated on who the buyer for that type of construction is and what they will pay.

Just another consequence of offshore money, everyone thinks there's a foreign millionaire just waiting to snap up whatever's on offer.

[Hmoob]

Originally Posted by whatnext

I believe the point being made is that the developer drastically miscalculated on who the buyer for that type of construction is and what they will pay.

Just another consequence of offshore money, everyone thinks there's a foreign millionaire just waiting to snap up whatever's on offer.

Maybe that was the point giallo was making, maybe not... Time will tell what price these condos sell for. I was responding to the fallacy often repeated here and in Vancouver that by lowering fees/costs on a particular project, we should expect its condos/apartments to be proportionally less expensive.

Originally Posted by misher

Taxes and extra costs always get passed onto the consumer. Lower costs means developers will build more and prices will fall. Where in Canada has the highest development costs? And where in Canada has the highest prices? The correlation makes this obvious.

Yes, minimizing taxes and extra costs can help shift the supply curve such that more construction and sales occur and at a lower price. But that's an indirect mechanism that takes time to become apparent. It also discounts other psychological, regulatory, and market factors in Vancouver that work to limit the housing supply and prop up current prices.

[misher]

Originally Posted by Hmoob

Maybe that was the point giallo was making, maybe not... Time will tell what price these condos sell for. I was responding to the fallacy often repeated here and in Vancouver that by lowering fees/costs on a particular project, we should expect its condos/apartments to be proportionally less expensive.



Yes, minimizing taxes and extra costs can help shift the supply curve such that more construction and sales occur and at a lower price. But that's an indirect mechanism that takes time to become apparent. It also discounts other psychological, regulatory, and market factors in Vancouver that work to limit the housing supply and prop up current prices.

It doesn't have to be indirect though. We could create an affordable condo program that offers to waive fees on development if they price condos below xxx similar to how we have rental programs that offer density if they have rents at below market. But the city is extremely greedy and is funneling money from housing to its social programs to drive up prices yet buy votes. And of course there's a coordinated campaign to blame it on minor factors while ignoring the big issue.

If you wanted to reduce housing prices try reducing a ton of cheap condos annually at prices that can't be bid up and see what happens.

[GenWhy?]

Originally Posted by misher

It doesn't have to be indirect though. We could create an affordable condo program that offers to waive fees on development if they price condos below xxx similar to how we have rental programs that offer density if they have rents at below market. But the city is extremely greedy and is funneling money from housing to its social programs to drive up prices yet buy votes. And of course there's a coordinated campaign to blame it on minor factors while ignoring the big issue.

As with rentals under the programs you mention, the easy way to get around that would be to buy the condo at a reduced price then sell it for a profit after-the-fact. Land cost and building costs don't do down. That's why rents and condos are priced higher.

[Hmoob]

Originally Posted by misher

It doesn't have to be indirect though. We could create an affordable condo program that offers to waive fees on development if they price condos below xxx similar to how we have rental programs that offer density if they have rents at below market. But the city is extremely greedy and is funneling money from housing to its social programs to drive up prices yet buy votes. And of course there's a coordinated campaign to blame it on minor factors while ignoring the big issue.

I tell you what, why don't you institute that program, and give me a heads-up when the units are about to go for sale. Then me and my friends can buy all of them. We'll sell them later at full market value consistent with any full-price condos in the area. I might use my profits to buy a nice sailboat. Unless you can think of another group of initial buyers who are more deserving of the massive windfall...

[misher]

Originally Posted by GenWhy?

As with rentals under the programs you mention, the easy way to get around that would be to buy the condo at a reduced price then sell it for a profit after-the-fact. Land cost and building costs don't do down. That's why rents and condos are priced higher.

Of course there would be things like it needs to be held 10-20 years, can only be bought by a resident of Vancouver making xxx income, if sold within that period they must pay xxx, etc. Restrictions similar to what we put on our affordable rentals. There is a way this could work.

[GenWhy?]

Originally Posted by misher

Of course there would be things like it needs to be held 10-20 years, can only be bought by a resident of Vancouver making xxx income, if sold within that period they must pay xxx, etc. Restrictions similar to what we put on our affordable rentals. There is a way this could work.

The profits for MIRHPP are hardly there for a 10-storey building, FYI. They only fly when you do it on a SF home lot and 3x the density. You're creating red tape when you've been calling for reductions. The fees are not the issue, otherwise it would be property taxes. The issue is construction and land costs.

[Hmoob]

Originally Posted by misher

Of course there would be things like it needs to be held 10-20 years, can only be bought by a resident of Vancouver making xxx income, if sold within that period they must pay xxx, etc. Restrictions similar to what we put on our affordable rentals. There is a way this could work.

Some of those measures already don't sound particularly fair, or appealing to lots of potential home buyers.

More importantly, people find ways to cheat.

At its best implementation, the program is so undesirable that it isn't worth cheating. But then it won't be broadly utilized and significant resources will be taken up by administrators and potential buyers (or their paid consultants) handling the details of the program. Counting the administrative costs and limitations against the expected benefits leaves little to no value. And it won't really do anything to lower the cost of free-market housing. It becomes bureaucracy for the sake of bureaucracy

[CanSpice]

Originally Posted by Hmoob

Some of those measures already don't sound particularly fair, or appealing to lots of potential home buyers.

More importantly, people find ways to cheat.

At its best implementation, the program is so undesirable that it isn't worth cheating. But then it won't be broadly utilized and significant resources will be taken up by administrators and potential buyers (or their paid consultants) handling the details of the program. Counting the administrative costs and limitations against the expected benefits leaves little to no value. And it won't really do anything to lower the cost of free-market housing. It becomes bureaucracy for the sake of bureaucracy

These are pretty much the same measures taken in Whistler. Covenants on the property (which is how purpose-built rental is done in New Westminster, for example) restrict the maximum resale price of condos. They also can only be sold to people that work in Whistler and don't already own another property.

And no, they wouldn't be free-market properties. That's the point.