Vancouver Real Estate 'Bubble' at 30-year Peak

[misher]

Originally Posted by whatnext

That's why I cheer the real estate bubble bursting. Investors need to learn condos aren't always a sure-fire winner and that there are other means to invest.

As a renter I know that more investment in real estate=more rental condos=lower rent for me.

I hate rich homeowners like you who have ruined affordability in this city. We have a rental crisis yet your pushing rental supply out of this city. Its just completely selfish.

[cornholio]

Looks like there are some desperate sounding folks in this thread who made bad investments.

Investing in realestate is equivalent to investing in food or water. Sure its safe long term because there is always demand, but you dont get to control the market because its necessary resource to life. In other words there are zero limits to government control. Even nationalization is always a option to house the population in a disaster. As a extreme scenario.

Taxes change all the time. They not only changed for budget reasons but to discourage a damaging practice in a housing shortage. If you have a empty home and the increased fees to hold are too much sell it. Its quite simple.

[Migrant_Coconut]

Originally Posted by misher

As a renter I know that more investment in real estate=more rental condos=lower rent for me.

I hate rich homeowners like you who have ruined affordability in this city. We have a rental crisis yet your pushing rental supply out of this city. Its just completely selfish.

There's no such thing as a "rental condo" - they're 100% strata. If you mean that we need to increase apartment construction, most of the forum is behind you on that.

[nds88]

Originally Posted by Migrant_Coconut

There's no such thing as a "rental condo" - they're 100% strata. If you mean that we need to increase apartment construction, most of the forum is behind you on that.

Apartment construction takes massive amounts of capital, which few individuals can do. Its somewhat easy for an individual to become a landlord via a condo building. When a condo completes, generally, some percentage is rented out. I don't know what the average is for the City, but the building I live in near the core is over 50% rented out and another condo I rent out in downtown is 66% rented out. In both these buildings, the number of rentals exceed owner occupancy.

The fact is that building anything, even stratified condos, adds to supply of both owner occupied units and rental units.

[whatnext]

Originally Posted by nds88

Apartment construction takes massive amounts of capital, which few individuals can do. Its somewhat easy for an individual to become a landlord via a condo building. When a condo completes, generally, some percentage is rented out. I don't know what the average is for the City, but the building I live in near the core is over 50% rented out and another condo I rent out in downtown is 66% rented out. In both these buildings, the number of rentals exceed owner occupancy.

The fact is that building anything, even stratified condos, adds to supply of both owner occupied units and rental units.

And I bet those buildings show it.

Like I said, if you want to invest in condos buy into a REIT.

[Migrant_Coconut]

Originally Posted by nds88

The fact is that building anything, even stratified condos, adds to supply of both owner occupied units and rental units.

We agree on at least that much. The problem is said supply getting flipped and re-flipped, so that prices stay high no matter how much is produced.

[nds88]

Originally Posted by whatnext

And I bet those buildings show it.

Like I said, if you want to invest in condos buy into a REIT.

I'm not sure what you mean by that. If you are referring to wear and tear or "niceness" of these buildings.....these are buildings 10 years old or newer. Very good condition and minimal issues with occupants (both tenants and owners). Unless I was told this info, I would assume they were majority owner occupied.

[Sheba]

10 resolutions at this week's B.C. municipal conference worth knowing about

Every year, mayors and councillors from across British Columbia gather for a week of sharing best practices, meeting with provincial government officials, and attending lobbying events — some more controversial than others — at the Union of B.C. Municipalities Conference.

...

3) Expand the vacant homes tax

While the province has a speculation tax for empty homes in the Lower Mainland, Greater Victoria, Nanaimo and the Kelowna area, only Vancouver is allowed to levy its own vacant home tax.

That's because Vancouver is governed by a separate charter than B.C.'s other municipalities — but a number of mayors would like the province-wide Community Charter changed so they can create their own tax.

"Right now we have no rights or controls at all," said White Rock Mayor Darryl Walker, whose municipality put forward resolution B181, asking the province for the appropriate changes.

"We have very little opportunity to create affordable housing and yet there are people in our community that very much need it ... and it's also a way of making our communities more vibrant. An empty lot on Marine Drive does absolutely nothing for anybody."

...

[SpongeG]

Avalanche of apartment buildings hitting Metro Vancouver market

Business In Vancouver
By Frank O'Brien -September 25, 2019

In the past few weeks, landlords have besieged Mark Goodman, a multi-family specialist with Vancouver’s Goodman Commercial Inc., wanting to list their properties for sale, including rare portfolios in Vancouver’s hottest rental neighbourhoods.

“This is unprecedented,” said Goodman, who has been selling rental apartment buildings for 18 years.

He said most of the potential sellers are local families that have held rental property for years. Now, he said, many want to get out of the market, even with Vancouver rents at historic highs and the city’s vacancy rate the lowest in Canada.

“We have 18 active listings now worth more than $250 million,” he said.

Goodman expects to have two dozen within weeks. Current listings include a four-building portfolio in the South Granville area, totalling 114 suites that the longtime owners have listed for the first time.

Each sale is individual, but Goodman contends they are fuelled by an underlying frustration with provincial legislation that caps rent increases at 2.5% this year, combined with soaring property taxes, based on assessments that are now often higher than the buildings could sell for.

For example, BC Assessment has valued an aging 16-suite, walk-up apartment building on Bute Street in Vancouver at more than $10.9 million, with the land alone assessed at $10.3 million.

Goodman has it listed at a discounted price of $9.25 million.

The owner of a 44-suite building on Balmoral Street put it up for sale this month after annual property taxes hit $50,000, based on a spike in its assessed value to just under $19 million resulting from an $850,000 increase in assessed land value from a year earlier.

...

https://www.vancouverisawesome.com/2...-vancouver-bc/

[misher]

Originally Posted by SpongeG

Avalanche of apartment buildings hitting Metro Vancouver market

Business In Vancouver
By Frank O'Brien -September 25, 2019

In the past few weeks, landlords have besieged Mark Goodman, a multi-family specialist with Vancouver’s Goodman Commercial Inc., wanting to list their properties for sale, including rare portfolios in Vancouver’s hottest rental neighbourhoods.

“This is unprecedented,” said Goodman, who has been selling rental apartment buildings for 18 years.

He said most of the potential sellers are local families that have held rental property for years. Now, he said, many want to get out of the market, even with Vancouver rents at historic highs and the city’s vacancy rate the lowest in Canada.

“We have 18 active listings now worth more than $250 million,” he said.

Goodman expects to have two dozen within weeks. Current listings include a four-building portfolio in the South Granville area, totalling 114 suites that the longtime owners have listed for the first time.

Each sale is individual, but Goodman contends they are fuelled by an underlying frustration with provincial legislation that caps rent increases at 2.5% this year, combined with soaring property taxes, based on assessments that are now often higher than the buildings could sell for.

For example, BC Assessment has valued an aging 16-suite, walk-up apartment building on Bute Street in Vancouver at more than $10.9 million, with the land alone assessed at $10.3 million.

Goodman has it listed at a discounted price of $9.25 million.

The owner of a 44-suite building on Balmoral Street put it up for sale this month after annual property taxes hit $50,000, based on a spike in its assessed value to just under $19 million resulting from an $850,000 increase in assessed land value from a year earlier.

...

https://www.vancouverisawesome.com/2...-vancouver-bc/

This is actually really bad as it means rental buildings are not worth developing and thus less rental gets built. I think it’s clear that we’ve gone too far with tenant protections such that we are doing more harm than good.

[dreambrother808]

I couldn’t care less about this. Rents are insane. If they think the answer is to increase the cap on that they can frankly go to hell. Any sane person in this city is sick and tired of business models based on the nonchalant crippling of the middle and lower classes.

Originally Posted by SpongeG

Avalanche of apartment buildings hitting Metro Vancouver market

Business In Vancouver
By Frank O'Brien -September 25, 2019

In the past few weeks, landlords have besieged Mark Goodman, a multi-family specialist with Vancouver’s Goodman Commercial Inc., wanting to list their properties for sale, including rare portfolios in Vancouver’s hottest rental neighbourhoods.

“This is unprecedented,” said Goodman, who has been selling rental apartment buildings for 18 years.

He said most of the potential sellers are local families that have held rental property for years. Now, he said, many want to get out of the market, even with Vancouver rents at historic highs and the city’s vacancy rate the lowest in Canada.

“We have 18 active listings now worth more than $250 million,” he said.

Goodman expects to have two dozen within weeks. Current listings include a four-building portfolio in the South Granville area, totalling 114 suites that the longtime owners have listed for the first time.

Each sale is individual, but Goodman contends they are fuelled by an underlying frustration with provincial legislation that caps rent increases at 2.5% this year, combined with soaring property taxes, based on assessments that are now often higher than the buildings could sell for.

For example, BC Assessment has valued an aging 16-suite, walk-up apartment building on Bute Street in Vancouver at more than $10.9 million, with the land alone assessed at $10.3 million.

Goodman has it listed at a discounted price of $9.25 million.

The owner of a 44-suite building on Balmoral Street put it up for sale this month after annual property taxes hit $50,000, based on a spike in its assessed value to just under $19 million resulting from an $850,000 increase in assessed land value from a year earlier.

...

https://www.vancouverisawesome.com/2...-vancouver-bc/

[SpongeG]

B.C.'s housing speculation tax faces first major legal challenge

Lawsuit alleges tax is unconstitutional and beyond power of B.C. government

Eric Rankin · CBC News · Posted: Sep 26, 2019

Six homeowners have launched a legal fight against B.C.'s Speculation and Vacancy Tax — the only major lawsuit over the tax to reach the courts.

In a lawsuit filed Thursday, the homeowners claim the speculation tax unfairly targets residents and out-of-country Canadians who split their time between two homes — many of them retirees with limited income, who are house rich but cash poor.

The civil action alleges the levy is unconstitutional, infringes on the Charter of Rights and Freedoms, and is beyond the power of the provincial government.

It seeks an injunction to stop the province from imposing the tax.

...

https://www.cbc.ca/news/canada/briti...DWygdA7L_yHaEM

[whatnext]

Wow, so not only does this guy: aid in destroying affordable rentals; drive up the cost of housing through speculation; he tries to cheat his realtor out of their commission. #banforeignowners

A businessman who made $6.67 million in a matter of months by flipping a bundle of Burnaby lowrises has been ordered to pay his realtor $1.15 million in outstanding commissions.

The judge also dismissed the man’s attempt to have a $300,000 bonus paid to the realtor returned.

Wenxue Wang is a businessman from China with a net worth in the millions of dollars, according to B.C. Supreme Court documents.

He got involved in the local real estate market shortly after his first visit to Canada in 2014, soon learning about the concept of land assembly – the packaging of several properties together for redevelopment.

By November 2015, Wang had secured accepted offers on three adjacent lowrise apartments at 6585, 6559 and 6525 Sussex Avenue in Metrotown for $33.3 million with help from realtor Laura Zhao and her father Raymond Zhao, president of Vancouver Home Park Realty Ltd.

According to evidence presented at a civil trial earlier this year, Wang had signed an exclusive listing agreement with the Zhaos and agreed to pay them a $300,000 bonus for assembling the properties under his control.

Without telling the Zhaos, however, Wang then began working with another agent, Robin Fu, and signed over the properties a few months later to a new buyer for $40 million, earning $6.67 million in assignment fees from the purchase and from the transfer of the rights...

....Meanwhile, included in the paperwork Wang signed to dispose of the properties was a document deducting $300,000 from his proceeds for the Zhaos’ bonus.

Wang said he didn’t realize the deduction had been made until he picked up his cheque the following day.

When Raymond Zhao called him later that same day to press him about the exclusive listing agreement, Zhao said Wang told him to forget about it or he would sue him over the $300,000.

Wang then posted a general message in a group chat about potential realtor fraud and threatened to release the name of the realtor in one week.

He also made contact with a journalist and a story was published about the Zhaos’ alleged misconduct.

Wang then filed a lawsuit for the return of the $300,000 in July 5, 2016.

Putting himself forward as a Chinese newcomer who could not understand, read or speak English, he claimed the Zhaos had breached their fiduciary duty and taken advantage of him, getting him to sign the bonus agreement under false pretences...

https://www.burnabynow.com/news/man-...15m-1.23960422

[Metro-One]

That dude sounds pretty slimy.

It really does feel that in the majority of cases to become mega wealthy you need to be a sociopath.

[retro_orange]

Originally Posted by Metro-One

That dude sounds pretty slimy.

It really does feel that in the majority of cases to become mega wealthy you need to be a sociopath.

Only a sociopath would see value in hoarding wealth.

[misher]

Likely we will begin to see some decreases in construction employment over the next 12 months as it winds down from the 2016-2017 high.

Total investment in building construction in B.C. slowed in July, decreasing 5.3% (seasonally adjusted) to $2.8 billion.

Investment in non-residential building construction in the province was slightly higher than in June (+0.5% to $773 million). Spending on new buildings was up in the commercial (+0.5%) and institutional (+1.3%) sectors, offsetting a 0.8% decline in investment for new industrial projects.

Nationally, non-residential construction expenditures inched up 0.3%.

On the residential side, investment in B.C. slipped 7.3% (seasonally adjusted) in July. This marked the fifth monthly decrease in investment in residential structures in 2019. The decline was due mostly to a slowdown in spending on new multiple (including doubles, row homes, and condo and rental apartments) dwellings (-10.7% to $1.3 billion), as the decline in investment in single-detached homes was comparatively modest (-1.1% to $736 million).

Nationally, a 0.6% increase in total residential investment in July was driven by gains in Ontario (+5.4%), Alberta (+4.1%) and parts of Atlantic Canada.

Also sales in Sept 2019 were up 32% from Sept 2018 although still below the 10 year average. Likely this indicates the market has bounced back but it remains to be seen if sales will continue to increase or stay at above 2018 but below average levels.

Correction, its up 47% and is at the 10 year average.

[trofirhen]

Given the exhorbitant cost of buying real estate in the Vancouver region, and the concommitant astronomical rents, I saw this, and wondered if anything parallel might happen here. I do not take pleasure in people losing profit, except if it involves the well-being of those in dire need.
Is there any link here between the BC home investment buyers' tax, and what is happening in NYC? Perhaps not, but I leave this to more informed SSP members. Thank you for your time.
https://nypost.com/2019/10/02/manhat...5073-719806102

[misher]

Originally Posted by trofirhen

Given the exhorbitant cost of buying real estate in the Vancouver region, and the concommitant astronomical rents, I saw this, and wondered if anything parallel might happen here. I do not take pleasure in people losing profit, except if it involves the well-being of those in dire need.
Is there any link here between the BC home investment buyers' tax, and what is happening in NYC? Perhaps not, but I leave this to more informed SSP members. Thank you for your time.
https://nypost.com/2019/10/02/manhat...5073-719806102

It has been discussed at Vancouver City meetings that the biggest issue with rent control is that the wealthy are abusing the system. City staff's research shows that many under rent control can afford a much more expensive place, but they stay in their current "affordable" rental condo because rent is way below market. Many renters even own places but do not move out because the rent they can charge on the place they own is much higher than they pay.

The abuse of the rent control system by the wealthy is a huge contributor to the lack of supply of affordable rental homes for the poor. I strongly support restricting rent control to those making below average. The rich or those with significant assets should not be protected by rent control. Its been pointed out many times that our mayor makes well into the 6 figures but is in a rent controlled condo.

We have a limited number of condos in older buildings that are considered "affordable" rentals, yet many people who don't need the subsidy are taking it. The problems with systems like rent control is that it creates winners and losers irregardless of actual income/wealth and thus its open for abuse.

Renters are not necessarily wealthier or better off than Owners and a policy that picks one over the other is not progressive.

What even gets more ridiculous is that people spending $5000+ on rent monthly have the same protections as someone spending $600 a month.

[cairnstone]

I think we alll know that friend that is in a cheap rent place and stays there. I had an employee that made most his income from a US company. he never declared his pay as he would go to the states to cash his check. He worked contract so it never showed up as income as he cashed his check state side. He worked as a temp in the off season and used that as his income that way he he qualified for low income housing. I have a friend that lives in a co op and owns an apartment that he never discloses. SO many scams

[whatnext]

Oh dear, this is a sad statistic. On the bright side you might be able to score a good deal on a lightly used, early lease return Audi.

Number of realtors in Lower Mainland dropping: study