Friday, May 9, 2008
April Housing Starts
CMHC's release of April housing starts for Vancouver Island can be found here. Rising housing inventory shows no sign of slowing down.
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About Me
- Prairieboy
- Victoria, BC, Canada
- Having been transplanted from the Prairies to the West Coast, I am left bewildered and confused with Victoria's current housing market.
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185 comments:
Inventory is definitely rising.
Houses - Condos - Towns
I just received all the remaining VREB/CMHC data so all the slideshows and graphs have been updated. Drop by and browse around and see the all the numbers for Victoria and Vancouver Island.
Your comments and views will be interesting to read.
Patriotz:
- Thanks for the clarification on the differences between California and BC taxing styles!
Makes sense. Although, I guess that even though they can budget exactly how much money they get from annual property taxes, one thing they can't "budget" for is how much funds will come in from the proceeds of house sales. If they assume (as many bad governments do) that house sale income will be the same this year as previous years, and budget for that, they are in for a rude awakening.
-Percival
PS Garth Turner was on CFAX this morning at 9:10AM. Did anybody catch it?
I certainly hope prices come down in Victoria.
I moved here in the fall of 2007. I have a nice steady job making around $70k/year and I feel locked out of the housing market. I'm renting a really nice apartment for about $400/month with a great view of the ocean close to the centre of town.
So I can wait a while. But if housing prices haven't taken a serious beating by mid 2010, I'll likely leave Victoria and live in a more reasonable part of the world where there's cheaper homes, higher salaries and better healthcare...
R
Roger -- I looked at your charts -- interesting, and somewhat dismaying. I am moving to V for a job I have accepted, and the trend lines over the past 3 years are crazy. But one thing hidden in these stats, I think, is what people are getting for their money -- i.e., value. Monthly sales #s seem lower for 2008, but mean/median sales prices appear to have a fairly steady upward slope, although it 'might' be tapering off. Assuming that demand is falling/supply is rising, which yields a downward pressure on prices, I am wondering if there is any way to capture what people are getting for their money -- and is that changing? Is there any way to capture value, (for example, in terms of price paid versus assessments (too crude?)) -- or anything else in the available data?? Thanks, dirk.
Dear Anon 12:21,
"Value" can be looked at in two ways.
1) You can logically pre-define it and therefore be able reach some conclusive state of whether something is of value or not. This is usually possible to do if you "pause time" and look at things from a temporary snap-shot perspective.
2) Or you can look at it from the perspective of human psychology and/or a perspective that is not frozen in time but dependant on ever-changing variables. In other words, it might be valuable at some point, but it may be equally unworthy at another point. Something is only valuable if it is desired. Desire changes with circumstance, mood, perception and evironmental/conditioning variables. In other words, if one day humans frame in their mind a definition of value that is based on the idea that purchasing something no matter how ridiculously high priced it may be from historical trends, that it will continue to go up higher, then that is one (temporary/snapshot) perception of value. However that same human in a different time frame (say a future with higher housing supply), may think that there is no value in buying something that is in the process of losing its worth and with no end in sight of when price reductions will stop.
There is also another point to be made. If you construct a definition of value that puts too much focus on the wrong variables or variables that should have a lesser weight, then your idea of value will be skewed from reality. Point in case, "housing is worth more in Victoria because the weather is so much nicer than the rest of Canada". That may be so, and yes it should influence higher prices, but not ridiculously higher prices. Ridiculously higher prices is a sign of specuvesting (speculation investing), and that variable if ignored can wipe out value from a market faster than you can complete your mortgage term and sell your house at a loss.
mr.4am
While I appreciate your points (as I understand them), I would define value = perceived benefit divided by price. For example (from a practical perspective), I know people in Vic who would like to sell and move up market, but they haven't because they don't consider the extra 200K they are willing to spend on the new place to provide enough perceived benefits. So, they continue to sit tight. [I think this fits with your second point, i.e., temporal dimension] ---
I assume that there is a fairly robust price floor for the market around Vic, driven by a combination of factors including the local job base and the average size of the nest egg brought in by people who move into the area. So, my point is that for the example I used above -- the local couple who are willing to spend another 200k for an upgrade may do so when they perceive they are getting more for their 200K than they were previously in an overheated market. And, just looking at mean selling values may not tease out that story. Perhaps looking at the median may help. [Actually the crux of my question is probably driven by lack of data, i.e., only mean and median selling prices are available, with little else to supplement it.]
Anyway, as a potential buyer in the Vic area, it's good to see some potential downward movement in the market, or at least smaller increases in prices!
Thanks, dirk.
Dirk,
Yes the prices of real estate in Victoria are mind boggling to someone moving here. We are second only to Vancouver in terms of price.
Although value is hard to define I think most bears on this blog would say that a buyer today is not getting good value for their money in Victoria. One only has to look at what you get for 500K in Sooke or Mill Bay to see what I mean (but commute is not fun).
If you want to look at statistics other than average and median here are a couple of sites with good information.
Landcor Housing Price Index
Royal LePage House Price Survey
If you can be more specific on what you need/want in a home (apt., townhouse, SFD) I can provide a more detailed response.
Did anyone see the article in the Vancouver Sun, "Median Incomes Plummet in B.C.," on May 1? Here's a quotation: "After-tax income more accurately depicts what families have available to spend. The median after-tax income of all economic families in 2005 was $57,599 in B.C., compared with the median before-tax income of $65,787. In Canada, the median after-tax income of all economic families was $57,178 in 2005." B.C. has apparently had the largest median income decline in the country.
I looked up median income for Victoria, and it is slightly higher, but not much.
So, according to Roger's charts, the current median sfd price is about $560K. That means a multiple of nearly 10 times median income. Anything with a multiple of 5.1 or more is rated as severely unaffordable by the Demographia Housing Affordability Survey. We are now in Los Angeles peak territory! Their multiple was the highest measured, at 11. Vancouver must actually be past that now.
What strikes me about prices this year is that they seem to be motivated more by greed and stupidity than by any actual "market factors." I have seen several houses on the market again, after having changed hands a year or two ago, with price increases of $200K or more. Nothing has been done to the house. In one case, the Vancouver speculator simply bought an old house near UVic, rented it out, and sold it a little more than a year later for a $200K profit. The driving force for prices seems to be, "Let's see what outrageous price some house near us sold for, and add 100K."
I am also observing, through my PCS, absolutly insane asking prices throughout Saanich east, Victoria and Oak Bay, for houses of around 2000 sq. ft. For a really crappy house, prices start around $700K. Because virtually every house has a "finished basement," they pretend that it's 3000 sq. ft. or more. I'm sorry, I don't intend to spend my life in the basement. Don't include it in my finished sq. ft. please, and try to gouge another 250K for all this lovely, extra, damp dark 6'high space. The one positive thing I have noted is that sales in this category, at least according to my pcs, seem to have come to a dead halt in the past several weeks. However, until people get real on pricing, it's pointless even to think of going in with a lowball offer, no matter how dead sales are. For one thing, I wouldn't even offer 50% of what most of these houses are asking.
I grew up with real estate. My dad was a developer for more than 50 years. I have never seen anything this crazy. I simply don't know what is going to happen next, but this just can't go on. I am truly worried about many youngish families I know who have bought recently because they were convinced that if they didn't they would never own a home. As much as I do want the situation to normalize, I know that a lot of people are going to go through enormous pain. I don't know, it's like we've gone through the looking glass and don't know how to get back.
Wow, check out these Kelowna numbers posted over a BC real estate talks.
Kelowna inventory increases dramatically
Things are getting interesting inventory wise on the mainland
""However, until people get real on pricing, it's pointless even to think of going in with a lowball offer, no matter how dead sales are. For one thing, I wouldn't even offer 50% of what most of these houses are asking.""
Well,not at 50%---, but within reason, I disagree- You may be wasting some time (and possibly annoy the realtor-which is a great big "who cares") but thats how listing prices will come down. Sellers are not going to drop prices SIGNIFICANTLY in a vacuum-even if there is no activity on their property.
Provide them with a bid (or an "offer" as it is termed in the upside down world of RE jargon) and they will at least have something to think about and respond to.
victorianna said:
looked up median income for Victoria, and it is slightly higher, but not much.
So, according to Roger's charts, the current median sfd price is about $560K. That means a multiple of nearly 10 times median income.
The latest median income from the 2006 census reported by Canadian Press last week indicates the median income for families in and around Victoria was $70,878.
With the median SFD at 558K last month this is 7.9 times median family income. I agree that this is crazy when the national average is around 3.1 source CTV.
CMHC, CREA, BCREA and most bank economists predict this will go higher with houses increasing by about 9% in 2008 which will result in a ratio of 8.6!! I guess they figure 40 year amortizations, variable rate loans, nothing down and depleting RRSPs has not run out of gas yet.
Beagle said:
Wow, check out these Kelowna numbers posted over a BC real estate talks.
The Landcor report on Alberta buyers (pdf) shows that this region was much more popular with Alberta buyers than the Vancouver Island areas where they also purchased (Comox, Parksville Qualicum, Victoria). Sales up Island are down and inventory is very high as well.
Could it be that the downturn in RE in Calgary and Edmonton, coupled with buying in the US, has resulted in a severe drop in Alberta buyers in BC??
The value of a house is the market rent, period. That is the only objective measurement. That is not the same thing as the price. The market rent measures the benefit that someone gets from living in it. The price includes anticipated speculative gains.
one thing they can't "budget" for is how much funds will come in from the proceeds of house sales.
That's the property transfer tax and capital gains tax in the case of investment properties, which goes to the provincial (and federal for the latter) governments.
As I said before provincial revenues will be hid hard by an RE downturn, because never before has such a large % of the economy been in RE.
But of course the RE bust is going to come in tandem with a US recession that will hit BC right across the board (forestry is already in the tank). So where will the government cut spending? How about a city where they have a lot of employees but only a few Liberal MLA's?
At least two RE agents are making bear noises on Craigslist RE for Sale
Huge $ drop 2day....must SELL
Unreal..Market going down...bargains coming up.
what a stupid ad!
since the market's goin down, I think I'll just wait for a better bargain....
Here is a taste (Calgary) of what is to come in Victoria with our continued building:
http://tinyurl.com/4z5r99
Island boy:
Thanks for the post. Those were the most bearish comments I have heard from a realtor in a long time.
This statement was something folks in Victoria should consider:
MacLean said there are a few reasons for the continuing rise in active listings in the Calgary real estate market.
"You almost look at it like a perfect storm," said MacLean. "You've got cost-of-living issues. People's disposable incomes are being eroded quickly by food prices, gasoline, heating, electricity. . . .
"The other factor is a lot of people got in the market when it was peaked and paid a lot for their house. . . . With the cost of living going through the roof, the first thing to go is the house because they're overextended. They're house-poor."
And this is a booming economy province and the average house price is 475 K compared to Victoria at 630K!!
The other factor is a lot of people got in the market when it was peaked and paid a lot for their house. . . . With the cost of living going through the roof, the first thing to go is the house because they're overextended.
This doesn't make sense really. If they got into the market when it peaked, i.e. a year or two ago, the cost of living hasn't risen significantly since then. If they could afford the house when they bought it, they can still afford it know.
Rather people bought houses they couldn't afford from the word go, because they were expecting continued price increases. Just like in the US.
And as Roger said, if Calgary has an affordability problem, we've got one 50% bigger.
Unreal..Market going down...bargains coming up.
MLS listing doesn't say that - bet it wouldn't be allowed.
MLS®: 242499
Asking 750K. Listing doesn't say anything about a reduction either. Buy now before we have to drop the price!
Calgary is in FULL meltdown. We're next.
RE: MLS®: 242499
Listing shows the price reduction now. But take another $100,000 off... doesn't have ugly crappy particle board crown molding throughout. Just doesn't have that 1890 "finished" look the missus prefers...
re:"Calgary is in FULL meltdown. We're next."
Population of Greater Calgary is Approx. 3 1/2 times the population of Greater Victoria.
Number of condos for sale thru MLS in Victoria as of may 8- approx.1100 (not including THs)
Number of condos for sale thru MLS in Calgary according to the article. 3214
We seem to have a few more condos for sale per capita than the Calgarians, but of course they are going to be snapped up by buyers and "investors" from other places , including the USA(sure!) and---wait for it: ---------------------ALBERTA
lol
Calgary market ‘totally out of whack’...
This is a most favourable article..
I am a bear..sitting on the fence with half a million waiting to lowball..
Can't wait for the meltdown to starte happening here in Victoria to knock these speculators, realtors and sellers on thier arses. Has not happened to the extent that I would like to see. it it's LONG overdue.
here come's the
Calgary market ‘totally out of whack’...
This is a most favourable article..
I am a bear..sitting on the fence with half a million waiting to lowball..
Can't wait for the meltdown to starte happening here in Victoria to knock these speculators, realtors and sellers on thier arses. Has not happened to the extent that I would like to see. it it's LONG overdue.
here come's the
I've been reading these blogs for a while, and have to thank everyone for their information. This weekend has been especially good for discussion.
A question I'd like others opinions on about is the talk of a small dip only situation in Victoria. I'm thinking that economic, geographical, and qualitative factors aren't an indicator of our future. I believe that the moment real estate has become an investment it is impossible for it to reach a stable plateau. If it's value goes down even a little and doesn't show signs of escalating in the next 5 years, no investor will just stand bleeding money on a future hope. Unless you have unlimited resources a person will take a loss to bring things back to manageable.
The other interesting thing, the coast capital bank home page used to have "rent vs buying calculator" on it's scroll down options. Now you have to go looking for it.
Sorry for following up my own post with another. While I've started, no one brings up the quality of homes and condos being built today. With the leaky condo issues hitting a number of people I personally know, I'm terrified to buy.
Even new houses are built with the cheapest materials that will slide pass inspection. What hidden issues will we see with new homes in 15 years?
It seems to look like it's worth renting and saving until I can make the move to an older small house with a solid core.
Unless you have unlimited resources a person will take a loss to bring things back to manageable.
Correct. Bubbles never have small dips and then flatten out. Once prices start declining, cash flow negative investors head for the exits and no new investors will buy until rent equivalence is reached. This is always the historical bottom for RE busts.
Helldorado: How expats dream life in the Spanish sunshine has turned into a property nightmare
Butbutbut... I thought Spanish RE could never go down because everyone wanted to retire there!
I am truly worried about many youngish families I know who have bought recently because they were convinced that if they didn't they would never own a home. As much as I do want the situation to normalize, I know that a lot of people are going to go through enormous pain.
These people are going to go through the same pain whether prices stay the same or go down, right? They've still got the same house and are making the same payments. Eventually nominal prices will recover and they will be above water on their mortgage. But nobody should buy a house they don't intend to keep for 10 years.
As for myself, I bought my first house prior to a 20% price decline (80's). Sure I was ticked off that I hadn't waited longer to buy, but my mortgage payments were affordable, so it was no big deal. Life went on as before.
Nobody should ever take on onerous mortgage payments to buy a house in the expectation that prices will go up. If you can't afford reasonable payments, just don't buy. If everyone adopted this approach there would never be a bubble in the first place. Buyers who are willing to pay ridiculous prices are the ones responsible for the bubble in the first place and I have no sympathy for any of them.
Greetings from the subprime loan capital of the world, Orange County, California.
It looks like you guys are in the early stages of what we experienced last year - inventories rose, median price held steady or increased because of a few sales of expensive homes, and then inevitably the median price fell and fell hard. Number of sales and inventory of homes for sale are good indicators of where the market will be heading.
If prices are out of line with incomes, in the absence of ridiculous lending they cannot help but fall and revert back to the point where enough people can afford homes - unless salaries significantly increase. That is because rational people will not be willing to spend so much of their income to pay for a house, unless there is an expectation of rising prices.
If prices are falling then the thinking changes. That's whats going on now.
patriotz said, "Nobody should ever take on onerous mortgage payments to buy a house in the expectation that prices will go up. If you can't afford reasonable payments, just don't buy."
You're quite right, of course. The people I am thinking of, however, didn't buy out of greed, but rather out of fear, fear that if they didn't get in now they never would have another chance. These are people in their forties, reasonable incomes, but having started a little late in life, have young children.
I have personally been through many real estate cycles in different locations, including Toronto from 86-95. I have made money and lost money on houses, but never viewed them as a part of my investment strategy, just tried to make the best decisions I could to get decent accommodation for my family for the most reasonable cost. In Toronto, rents were so high, it made sense to buy, even if we lost a little when we sold six years later.
And that's another issue. Life happens. You may expect to own your house 10 years, but then another job comes up in another part of the country and you have to make a decision. Or, you lose your job, and can no longer afford payments and so have to sell. So, yes, I do feel very sorry for a lot of people who are going to feel very trapped by this mess as prices fall. I made a different decision, to wait it out and rent rather than buy something I knew was overvalued, but I had experience and education to help me make that decision. Many people I know got scared and jumped, essentially out of a feeling of panic. Everybody does that sometimes, makes a crappy decision out of fear. So I do sympathize with the fear that's out there right now, and which I fear is only going to get worse.
Wherever prices went up insanely, they will fall. This is a global phenomenon.
Anonymous May 9, 2008 11:27 PM,
Where the heck did you find a place to rent for $400/mo. close to town??? I'd love to know where, I'm looking for a cheap place near downtown.
travelgirlm@gmail.com
Helldorado: How expats dream life in the Spanish sunshine has turned into a property nightmare
Oh my gosh! That is one sobering article. I never even contemplated buying property in Spain, and it still scared me!
It's funny. I have always viewed this period of renting as "temporary," just until we decided the time was right to buy again. My husband, on the other hand, loves the freedom of renting. He also loves that he has all our capital to invest. Whenever I have talked about buying, he's always, "well maybe we should just keep renting; it's so much easier." With the credit crunch, global real estate prices collapsing, but Victoria and Vancouver remaining the real estate agents' last best hope, I really don't feel inclined to even consider buying. The uncertainty about where things are going to end up is so enormous. And I have never lived in one house for 10 years! We enjoy living in different places.
Maybe we'll buy with cash when we retire.
Yeah well I'm not so happy renting. Our landlord is really picky - does monthly inspections, complains about silly things like having a few leaves on our front porch in the fall... and he just informed us he is raising our rent by a lot if we want to stay another year and sign another contract. (He does it by yearly contracts and not month to month because it then gives him the freedom to raise the rent as much as he likes and can kick us out at the end of the year if he so desires...) We went from renting from a great landlord for three years to this - all because we had another kid and needed more space. And of course there isn't barely anything out there to rent at the moment. We are not happy renting but can't afford to buy.
Unhappyrenters
Unhappy renters... your day of salvation is at hand.
It might take a month or two; it might take a year, but you WILL be able to afford your house.
The people I am thinking of, however, didn't buy out of greed, but rather out of fear, fear that if they didn't get in now they never would have another chance.
Well OK, but my point is that these people thought that owning a POS was worth 500K, so they went out and borrowed 475K or whatever, and now they have their POS which they can make the payments on for the rest of their lives.
So just why exactly are I am supposed to feel sorry for them? They decided it was worth it. I decided it wasn't. They made their choice and I made mine.
And whether or not the market price of that POS drops to 300K (which I think it will), these people are going to be making the same payments, which they decided were worth it at the time of purchase.
I don't expect anyone to feel sorry for me because my car and computer are worth less than what I paid for them. I knew how long I expected to be using them and I paid a price at purchase time which I felt was justified.
Hey, the upside of all of this is the homeless on the streets of Vic are going to start looking a lot more upscale once their old cars conk out, and there probably will be a lot less crackheads in the bunch. Has to be good for tourism in the long run... of course only the rich will be able to travel, but they do so love seeing entire families on the streets, don't they?
Happy days are here again... Buddy, can you spare a twenty?
Interesting article in today's Vancouver Sun:
"Taxman's skewed appraisals add up to abuse"
http://www.canada.com/vancouversun/news/business/story.html?id=07d15584-d16b-4366-b2e0-a060e51882c4
Thanks for an excellent article.
Here's my comment:
AS IF the ridiculous appraised values had anything at all to do with reality of market value. All they are are purposely inflated tools to rape people out of their money.
Luckily that strategy only works in a booming market, where no one cares and they think they'll make it up in the appreciation. Once appraised values start reflecting hundreds of thousands more than the property can sell for, are we going to see some real anger and hopefully some realistic appraised values.
Carla Wilson writes another TC article that the bears will appreciate:
New-home prices in city inch higher
Excerpts and comments:
Greater Victoria contractors are getting slightly more money for the new homes they build compared to last year, Statistics Canada said yesterday.
Prices inched up 1.2 per cent from this past March compared to the same month a year ago. It's a slight drop from 1.6 per cent for the same period between last February and February 2007.
So new home prices YOY are almost flat from a year ago with a downward trend. How can resale homeowners expect to get big YOY gains when new house prices are little changed from a year ago?
Tony Joe, president of the Victoria Real Estate Board, said yesterday he was surprised the number isn't "a little bit higher."
Tony, Tony - be prepared for more surprises in the coming months.
Greater Victoria developers remain optimistic about the future. More new homes, many of them condominiums, are now under construction than at any time since the mid 1970s.
Just what the market needs right now in Victoria - more condos!!.
So if more condos are needed then Carla reports Builders of world's highest skyscraper eye downtown lot
Excerpts:
A project to build two condominium towers in downtown Victoria has been acquired by the developer of the Burj Dubai skyscraper .... Emaar's project at 819 Yates St., with close to 170 units, is Emaar's second project in Canada.
The project is "targeted largely to first-time home buyers. Young, urban professionals, 25 to 35 years of age," Ouellette said. Because affordability is an issue, about 75 per cent of the units fall into this category. Entry level units would be about 500 to 700 square feet.
Larger units of 800-to-1,400 square feet would offer two bedrooms and be suitable for those downsizing and wanting a flexible lock-and-go lifestyle.
Shoeboxes for professionals and 2 bedrooms for retirees moving from single family homes. Nothing like this downtown so they should be big sellers.
"and he just informed us he is raising our rent by a lot if we want to stay another year and sign another contract. (He does it by yearly contracts and not month to month because it then gives him the freedom to raise the rent as much as he likes and can kick us out at the end of the year if he so desire"
Unhappyrenter, this doesn't sound legal. As far as I know, if you have the same tenant staying in the property, you are limited to the 3% rent hike each year regardless of what type of lease or tenancy you have.
There's a common, self-defeating mentality among many people in BC that makes them bizarrely deferential to employers and landlords, to the point of not even requesting that their minimal legal rights are respected. I don't know where this beaten-down, feudal attitude comes from, but try not to be a statistic in this regard! Read up on the legalities on the BC tenancy website, but also take heart - there are plenty of rentals out there. You just have to look at quite a few real dogs to find the odd good landlord who bought some time ago and has some respect for the law. But this doesn't get you off the hook - all landlords need to be reminded of the law and the fact that you will enforce it. Nobody else will do this for you, and landlords will take advantage if they perceive that you have the "BC disease" of irrational deference to landlords.
Just my general two cents, I don't mean to lump you in with the depiction above - I'm just reminded of it.
Residential Tenancy Branch link
http://www.rto.gov.bc.ca/
Thanks but we did look it up... Landlords can only increase your rent up to 3.7% if you are month to month. If you have a contract (on one website it's described like a sports contract) when it ends you can make up a new contract with whatever you want on it. If the renter doesn't like the new contract they walk away... But as the landlord you are entitled to put whatever rent increase or new conditions you want on the new contract. It's unfortunate (but hardly surprising) that our landlord only uses one year contracts rather than at the end of the year going month to month. To be honest, I'm surprised more landlords don't do it this way - it does mean it's hard to get rid of your tenants during the year if you want to, but on the other hand if you know you want to rent your house out for the year it makes it really expensive for them to get out of the lease early (as they are responsible for the rent being paid the entire length of the contract)and no rights against you raising the rent as much as you like at the end of the contract.
We're hooped! :-(
Unhappyrenters
billy twobaulz:
Thanks for that - I was about to write something like that myself.
Unhappy renter:
There is a hotline for renters, that you can look up on that BC Tenancy website. The sole purpose of the people on the other end of the line are to hear stories like yours, and to tell you what your legal rights are as tenants.
BTW I can't understand why the landlord would be unhappy at the tenants about a few leaves being around. If the leaves fell off the landlord's tree (or his neighbour's), isn't it HIS responsiblity to clean them up? Just like it would be HIS responsibility to cut the grass (or perhaps even to shovel the walk after a snowfall?). Or, do you have something in your contract that makes you responsible for this?
Know your rights, and call that hotline as often as you have to, to know what they are. You don't have to start a war with your landlord, but you CAN demand some proper treatment and respect. Maybe you can print out, for your landlord, some online rules/bylaws renting rental agreements, raises in rents, etc?
- Percival
Those fixed term rental agreements are a really bad idea if you are a tenant - they are completely one-sided. At the end of the year you either have to sign another one-year fixed term (a completely new agreement with perhaps a much higher rent), or else you have to vacate. You have no flexibility when you can move out other than on the annual date.
I would never sign one and I don't think they should be allowed for residential rental properties.
I would never sign one and I don't think they should be allowed for residential rental properties.
Buy a house then, and call the shots yourself...
percival,
yard cleaning is the same as interior cleaning and should not be confused with maintenance.
to unhappyrenter, there are plenty of rentals around, you just have to look. don't be fazed by the abnormally reported low vacancy rates. right now is a great time to start finding a new place.
olives said:
Those fixed term rental agreements are a really bad idea if you are a tenant
It depends if the landlord really does want to only rent the property for a year and this is clear up front to the tenant. If it was a furnished rental the tenant may only want a year as well. If unfurnished I would not want the vacate at the end clause in the lease either.
However if a tenant gets caught in this situation there is a way to play it. In a fixed term, with tenant required to vacate at the end of one year, the tenant is not obligated to say anything prior to contract expiry. A smart tenant would say nothing and request that the landlord make any extension offers or new lease agreements in writing prior to any response. Then the landlord does not know the tenants intentions and by law can only increase the rent in the new lease by inflation+2%. The tenant should start looking for another place if nothing is heard two or three months before the lease expires.
If the the landlord thinks he can get a new tenant who will pay more he can choose not to renew the contract but will have to give 24 hours notice to the current tenant for any showings. This is a real hassle for the landlord. The tenant can always choose to be there and can advise the prospective tenant on the current rent and how he/she was treated.
A good landlord will often find good long-term tenants. Jerking people around always comes back to bite you down the line.
REALTOR DISHONEST ALERT:
Don't believe what you read when you see “new listings.” I’ve seen an increasing number of properties pulled off the market and relisted at lower prices, apparently in an attempt to hide the fact that the property sells well below the original asking price. For example:
202-2710 Grosvenor (2BR in Hillside):
Feb 12 2008 listed at $315,000
Mar 12 2008 re-listed at $299,900
Apr 1 2008 re-listed at $289,900
On April 14 the property sold for $282,000. Looks like it sold for 2.7% under the asking price, after 11 days on the market, right? Well, no, actually it sold for 10.5% below the original asking price after two months on the market.
One word comes to mind: “slippery”
- awum (too lazy to log in)
Of course that is still $35,000 (14%)over last years assessment for the property.
>>REALTOR DISHONEST ALERT
>>:
>>Don't believe what you read when >>you see “new listings.”
I wish realtors would realize that they are not winning anybody over by continuing this very shady practice.
Every few weeks you will see somebody else on this (or another) thread discover that realtors are doing this; these people will be sure to tell their friends and associates about the practice too.
Why is it so hard for realtors to be honest and up-front about something, for once?
"Buy a house then, and call the shots yourself..."
Well I just sold one and I have been a landlord myself and would never have asked for that type of lease personally, and I believe I have treated tenants how I would want to be treated myself.
That said, the landlord I have now is great and I signed a regular lease that reverted to month-to-month at the end of it.
I think most landlords use similar type of leases (reverting to monthly) rather than the fixed term, thank god, so contrary to what you may believe, you don't have to buy at the top of a market in order to avoid a fixed-term lease!
"Why is it so hard for realtors to be honest and up-front about something, for once?"
Because they're desperate and panicking. They were the LAST ones to see this coming, the LAST ones to control their own monthly expenses accordingly, and the FIRST ones to go out of business when they fail to realize the remainder of their careers as realtors will depend on talking obstinate clueless hopeless sellers into the lowest possible listing price (FAR below that of ALL their neighbors) and NOT bs'ing interested buyers with fake offers from invisible folks that don't exist. Buyers who are increasingly realizing they have the upper hand. Holding a sledgehammer.
Those who rode this train to "real estate riches" while going up the hill will be the last to jump off before it goes over the cliff at the top.
Expect some resistance, but resistance IS futile.
I think these warnings about fixed term leases are very useful, and Roger's strategy suggestion could also be helpful for people in that situation.
We just moved to a great new place and our new landlord wanted us to sign a fixed term lease. We really wanted the place so we were tempted, but instead were able to negotiate a one-year lease (giving the landlord comfort that the place will be rented for a year) that converts to month to month automatically at the end (giving us comfort that we won't be kicked out at the end of a year or face paying a major rent increase with no notice). In this case, our landlord was very reasonable and didn't want to have us leave at the end of a year - his aim was more that we sign another year lease at the end of this one. Since that was the case, our solution worked for both of us.
I really encourage all tenants to consult the website of the Tenants Rights Action Coalition at http://www.tenants.bc.ca/, in addition to, or instead of the residential tenancy branch. They are an independent non-profit advocacy group and have provided me with great free advice on my rights as a tenant on many occasions.
It might take a while to get through on the 1-800 hotline, because they are underfunded and understaffed - a great group to donate to.
Hey travelgirlm,
When I got to Victoria last summer I found a couple really nice apartments on the ocean for less than $500/month. One was downtown, the other beside the marina in Oak Bay.
I think in part I got lucky. Maybe I'm also desirable? I like to think so... :)
I've been looking for an apartment for a friend recently and haven't found any deals near as good. All I'm finding now is in the $700+/month range and it's not oceanfront, nor particularly close to downtown. But some are in some pretty nice neighbourhoods like the Cook st. area.
R
It looks like the "Calgary Stampede" has started early this year :-)
Sellers flood home market
Calgary's MLS listings are "totally out of whack," surpassing 10,000 in April and growing by the day while sales are slumping.
Listings for single-family homes and condominiums have hit an all-time record.
April MLS sales of single-family homes (1,363) in Calgary metro were the lowest for the month since 2000 while condo activity (581 sales) was the slowest since 2003 -- even before the years immediately leading up to the city housing market boom in 2006 and 2007.
Yes all those oil-soaked Albertans who are supposed to be supporting all of Island and Interior RE for eternity can't keep the party going on their own turf.
Our own realtor did the relist scam without us knowing. We listed in January and delisted in March to do some minor cosmetic repairs. We relisted again in May with $50k off the original listing price. The house then sold in two days for slightly over the 'new' asking price. He put on his website and marketing mailouts that HE sold our house within two days for over the asking price. BULLSH*T
First, HE did not sell it all he did was scratch a few sentences on the sales contract and smile with his condescending smug realtor face which I wanted to smack off of him.
I can't believe the RE industry has continued to operate under the same deceptive parameters. The entire system breeds dishonesty and smoke and mirrors. You know it's bad when a realtor hands you their card at an open house and they are proud to show their credentials as a MATH and ENGLISH teacher, ridiculous.
I decided that from now on, when I see a listed house that encompasses the UNFINISHED basement area in the finished square footage, I will call the listing realtor on it.. with a follow up call to the Real Estate board. They HAVE to be called on their LIES.
I would love to come up with a top 10 list of
'sneaky realtor tricks'
1 List, relist to avoid showing time on market or price changes
2 Fake 'bids' coming in on house
3 Avoid posting the address of listed house (wouldn't want anyone to do a drive by without their knowledge)
4 Put your 'best foot forward' bid as you don't know who else is interested
5 All bids being presented at 'such and such' a time
6 High selling appraisal price, followed by a reality check and a much lower adjusted selling price a few weeks/months later..
7 The super low asking price to spur a bidding war
8 Including unfinished areas in finished square footage
please add to this list as you see fit..
slagging welcome.
signed; miss morning rant
"I think in part I got lucky. Maybe I'm also desirable? I like to think so... :)"
NEVER underestimate physical attractiveness as reason for closing ANY deal.
However; it won't be a factor helping realtors much in the next decade anymore.
The sexiest deal is having the lowest price in any neighborhood.
RE: Sneaky realtor trick number 7:
Super low selling price to start a bidding war.
Uh, THAT trick won't be happening anymore in the next decade or so, becuase it won't work anymore; on the contrary, it will be the ONLY way to sell a house.
I did laugh at "best-foot forward' offers... "don't want to insult the seller with a low offer."
Insult, all you want. You won't be the first, but you might just be the last and only offer.
Unhappyrenters, thanks very much for raising this issue of the lease ending by ending the tenancy, rather than going month-to-month or new lease. I will be sure to avoid this like the plague. However, if I was presented with this on looking to rent a property, it would be a red flag, unless I wanted to move out in 12 months' time. I would opine that such a lease is a dealbreaker, since there's little point to it except to screw the tenant on the anniversary. As Roger points out, a decent landlord wants long-term tenants, not a revolving door of 1-year leases and disgruntled tenants every time.
Thanks for the warning!
Five luxury condominiums at Craig Bay in Parksville, BC up for auction
In today's TC there is an ad for an unreserved public auction for Parksville luxury condo's. I think we'll start to see more of this as inventory continues to pile up.
luxury condo's - a look into the future ?
vk said
In today's TC there is an ad for an unreserved public auction for Parksville luxury condo's.
I think it is fitting that the auction is being simulcast in casinos in Calgary and Vancouver.
Thank you for that. I just posted the link to the ad on KIV.
From British Columbia Real Estate Association website:
"More homes for sale - welcome news for homebuyers"
http://www.bcrea.bc.ca/news_room/2008-04.pdf
Wow, that British Columbia Real Estate Association press release is funny...way to try and spin a negative into a positive. I hope nobody is actually buying any of it.
Have they already exhausted "they aren't making more land," "you can't time the bottom," "all real estate is local" and "home prices are more affordable than they have been in years so it's a great time to buy!" yet?
I'm considering buying into the very low end of the victoria condo market. I'm renting for about 600$ a month, and am looking to get into a place for <200K. I want to keep it for 3-5 years then move elsewhere. Is it worth getting in now, should I wait, or continue renting? Probably a common question, but finding it hard to make sense of all that's going on. Prices are coming down now, but are they going to be down in 3-5 years?
Anon 12:13 PM
I'd wait if I were you! I'm in the same boat, I was looking for a condo in the $200,000 range a few months ago and after researching and getting people's opinions, I'm waiting to see what happens in the market.
It's ridiculous that for $200,000 you get a low-end condo here when you could buy a whole house for less than that in some parts of the US. It makes me mad!
So it's better to keep renting for a while and saving as much as you can for a big down payment and see what happens with the prices this year at least. I think the prices will go down...
Have y'all seen this article in the G&M?
Listings shoot up
>>I would love to come up with a
>> top 10 list of 'sneaky realtor
>> tricks'
#1: Pretending that they are worth the 6% or commission that you have to pay on selling your home.
#2: Pretending, when acting as a buyer's agent, to be working completely on the buyer's behalf, when the higher price the buyer pays for a home the more they take in commission.
#3: ALWAYS saying that it is a good time to buy AND a good time to sell. As a buyer/seller, it CANNOT possibly ALWAYS be a good time to do both. As a real estate agent, they could care less as long as they sucker you into doing whatever gets them their comission.
#4: Realtor favoring showing clients listings that favor the realtor, but not the buyer. (ie: may strongly favor the realtor's company, or listings which have higher comissions. In the U.S. for example, there can be "hidden" bonus commissions for the realtors)
...
#5..And many other examples...
But enough for now...
What we should realize is that any professional that is earning enough money to buy a $500,000+++ home probably has MORE of the applicable skills required for buying/selling a home than the vast majority of realtors. Why do you think they're realtors, after all? Do you think they dropped their job as a rocket scientist just so they could schlep biased market "analyses" and one-liners to gullible buyers? Go ask your realtor what professional credentials outside of realty, and you'll see what I mean (eg. I've seen model-wannabes with NO marketable skills in the real world become realtors!!)
What I'm saying is: instead of dropping $30,000 in commission fees, take a few weekends to become an agent yourself, save the money, and stop feeding these bottom-feeding scum-suckers with your hard-earned cash.
Realtors are salespeople. Nuff said.
S2
Anon 12:13 PM:
1) Figure out what the condo equivalent to your rental accommodation would cost.
2) Figure out the monthly mortgage fees, plus monthly condo fees and expenses, will cost you.
3) Subtract your monthly rent, and save the difference between the two figures. Put this in a decent interest-bearing account.
4) A year from now, two years from now, three years from now, you will be better off than if you had bought that condo -- even if the value rises slightly (which I doubt).
- awum
re: condo auctions in parksville
I cant resist--- I TOLD Y'ALL-- months ago
and:
CondoAuctionLand is moving south.
chortle
I'm considering buying into the very low end of the victoria condo market. I'm renting for about 600$ a month, and am looking to get into a place for <200K. I want to keep it for 3-5 years then move elsewhere.
Why don't you save yourself some time and just borrow, oh, 100K and burn it, because that's what your plan amounts to.
Wait for condos to go down to 100x rent and then buy, because that's all they're worth.
#2: Pretending, when acting as a buyer's agent, to be working completely on the buyer's behalf, when the higher price the buyer pays for a home the more they take in commission.
Correct wording:
Pretending to be a buyer's agent when in fact you are a second seller's agent because both of you are being paid a sales commission.
How about this one for your top 10 list.
The agent does not measure the home and is relying on an old listing which may not be correct. After buying the home you find out its smaller than you were told. But the agent is not responsible as it was up to YOU to verify the measurements.
What the heck am I paying these guys for!!
Siobhan
I also like how they include the patio as square footage. I've even seen one where the parking stall was included into the square footage.
so we sign up with this realtor to help us find us a house. we give him our parameters.
So far the only listings he's notified us about are the ones that his office is listing or he is selling..riiighht.
YOUR FIRED.
We are not blind or stupid.
The top 10 list is great..
I think I will post a wanted ad on usedvic or craigslist, looking for an honest realtor that does not answer yes to any of the top 10 scams.
>>What the heck am I paying these
>> guys for!!
You are paying them to pose for an ad with their arms folded, wearing a cheap blazer and a condescending smirk on their face... so that they may plaster that ad of themselves everywhere... in a lame attempt to convince a few people that they have a "professional" career and that what they do requires skills.
The truth of the matter is, many of them just barely scraped by highschool, can hardly operate a computer (but can do so just enough to get it to show a few listings), do not have any certified credentials to tell you about the construction quality of a home (that is you always must have a PROFESSIONAL INSPECTION done), often do NOT verify the measurements of the homes that they sell, and are just there to always give the the biased real-estate lines about how "now is a good time to buy or sell".
Oh, and for this realtors make a $30,000 commission on a $500,000 sale.
The system really is screwy, if you think about it.
After buying the home you find out its smaller than you were told. But the agent is not responsible as it was up to YOU to verify the measurements.
What the heck am I paying these guys for!!
You're not. The seller is.
>>an ad with their arms folded,
>>wearing a cheap blazer and a
>>condescending smirk on their
>>face...
Mind you...if, I had no other marketable skills yet were able to wrangle well-educated people (suckers) with REAL professions out of $30,000, (by doing next-to-nothing of special value), I'd probably have a smirk on my face too.
-Percival
Patriotz:
>>What the heck am I paying these
>> guys for!!
>You're not. The seller is.
One could argue that the seller sets his/her price taking into account the commission that he/she has to pay out.
So, the buyer in that way is paying for the commission.
-Percival
Folks - As a bear I feel that the majority of REALTORS® will be a big factor in the upcoming downturn.
Soon it will not be a great idea to have a bunch of listings that require advertising and MLS fees and don't sell. In a few months who will want to represent angry homeowners that are still asking last year's inflated prices?
So how will listing agents make their commissions and reduce expenses? By walking away from listings that are unrealistically priced; convincing current listing owners to reduce prices; and by pressuring sellers to accept offers that are below their expectations.
REALTOR® rules have changed and buyer's agents no longer have a fiduciary duty to the seller. Buyers agents will soon be scrambling for clients that are prepared to buy in a falling market. The tables have turned and buyers will wise up soon and be brutal. They will submit lowball offers and play hardball with sellers by walking away if they don't get what they want.
These MSM "cooling articles" are appearing with more frequency now:
Housing market is cooling, but by how much?
Toronto to be hot spot in cooling housing market
Cracks appear in the real estate market
Red-hot housing market loses its heat
To ^^^ several comments above about realtors:
- A $500,000 house does NOT yield a $30k commission, more like $18,000 as most realtors Ive dealt in Victoria with charge 6% of first 100k and 3% thereafter.
- Second, this is usually split 50-50 with the other realtor if there is one.
- so a $9000 commission, after fees to their office, nice car lease payments, cell phone bill, ads, etc.. yield a pay check close to half of this. (around 5k i'm told) Then the taxman take their cut and even less is left.
I'm not a realtor nor do I care about them, but I do have a peeve with mis-information being spread by people without the honesty and are too lazy to figure things out just like the realtors they critize.
On a side note, i'm enjoying watching this market...
Well, regarding commissions -
if there is no second Realtor involved, the take is more like $10,000 on a $500,000 house, after agency fees have been paid. Two realtors getting paid $5000 each is still $10,000 in commissions paid out and collected.
Do one of these deals a month on either end of the transaction, and you are still doing better than many of the people who live in Victoria.
Based on numbers of transactions in the local market, there are anywhere from 500 to 1800 of these full or shared commissions paid out in the local area each month. So the top realtors still have enough work available to make a lot of money.
Are they worth it? Hmmm....
Roger said: "These MSM "cooling articles" are appearing with more frequency now."
Oh but Virginia Galt said in the Globe today that Canada's market is "essentially sound," that we're not in for a "major correction," and that it's a soft landing for us! Sales may be dropping, but not to worry. All that market confidence will keep us afloat, right HHV?
Talk about being completely out of your mind. Here's a lovely example; they ruined the KNOTLESS cedar ceilings with white paint, put the cheapest possible white particle board cabinets in the kitchen, and they actually think they have a chance in hell of getting more than $600,000 for this 70's gem.
Nuts. Some folks deserve to have their houses drop 50% in value to 1999 levels.
"Hard to describe to the fullest"... I think I just did a fantastic job. Unless that was referring to the utter gall of the seller and realtor.
anonymous 1:56 pm:
>>- this is usually split 50-50
>> with the other realtor if there
>> is one.
Yes, $18,000 going to one (or two) people who most often did next to nothing in terms of work. That is STILL a huge ripoff.
>>- so a $9000 commission, after...
After not earning it is still about $9000 more than they deserve
>> fees to their office, nice car >>lease payments, cell phone bill,
>>ads, etc..
..
>>close to half of this.
Okay, gotta love your math. First, you're assuming they only make one sale per month, and that one sale is split with another realtor. Second, you're saying they spend $4500 on an office, car, phone, ads.
If realtors are spending that much on all these things, but only averaging one sale like this per month, they are bigger idiots than we all thought. That is no way to run a business, yet you are trying to sell us your sympathy for them?
A reasonably-sized office for one realtor and a car lease, especially for this kind of hypothetical agent, should not cost more than $2000 a month (and that is already being very generous). Ads, phone, a few hundred (if they are selling lots of homes, they will require more ads but also have a much larger income). Where'd the rest go?
OH, and I LOVE how part of your realtor sympathy argument is about thei NICE CAR! Poor, poor realtors have to pay for their BMWs, Lexus,etc!
. <--See that? That is me playing the world's smallest violin for poor, poor realtors that are FORCED by this cruel world to buy BMW's.
And BTW, thanks for bringing this up, because it only reminds us that realtors deduct their expensese for a NICE CARE from their income taxes - Yup, in effect that means they are screwing all Canadians yet one more time.
Wow, I wish MY job let me lease a car and deduct payments on it! Don't we all?
AH, but anonymous 1:56, your calls for sympathy get even more silly with this "argument":
>>Then the taxman take their cut
>> and even less is left.
WOW! You mean, they PAY TAXES on earnings, just like EVERY Canadian? Is this supposed to gain sympathy?
Don't forget, they only pay taxes on earnings after DEDUCTIONS, and they are deducting ALL those things like "NICE CAR"s you mentioned them having to spend on.
>>I'm not a realtor nor do I care
>> about them
After some really bad attempts at pitching your sympathy for realtors, I don't believe you.
>>I do have a peeve with mis
>>-information being spread by >>people without the honesty and
>> are too lazy to figure things >>out
HAH!! Now I've heard them all!
If you want a crash course on MISinformation, dishonesty, laziness, call up or look up your local association of realtors and take in all the B.S. statements and predictions they dish out about market conditions.
For starters, go look up all the press realeases from the NAR for the last three years. If you can stomach reading that, you will know what REAL misinformation is about.
Don't talk to ME about misinformation - after hearing realtors go on about how "prices can never go down" and "now is a good time to buy and to sell", I know all to well who the KINGS of misinformation are!
Roger said: "Soon it will not be a great idea to have a bunch of listings that require advertising and MLS fees and don't sell. In a few months who will want to represent angry homeowners that are still asking last year's inflated prices?"
This is interesting to me Roger as I have a friend with a house for sale on UsedVic right now, and she recently got a call from a well known realtor, promising to bring in a buyer at her full net if she listed with him. She agreed to meet with him to discuss, they set an appointment, but he never showed up. When she called his office to see where he was, they informed her he wasn't interested anymore - wtf? Not even a call?
I can only assume that he realized that he would never be able to get her that price AND he is extremely rude and unprofessional.
Canada: Sucker Nationa, part 3
I thought some of you might be interested in the above linked article, because it begins to explain why there's so many rich foreigners that buy condos in Canada and never end up living in them.
Apparently, believe it or not, this has a lot to do with Immigration abuse. If they fix immigration laws, this may come to a halt... but don't hold your breath as it is likely not to change very soon. Still, I was not aware of how this was all happening.
Interesting read.
Mr. 4AM
One could argue that the seller sets his/her price taking into account the commission that he/she has to pay out.
Sellers don't set prices. The buyers do. The seller takes the highest price offered by a buyer. Or doesn't sell.
All commissioned salespeople work for the seller, because getting the highest possible price is in the seller's interest, as well as the salesperson's.
The interest of the buyer, of course, is in the lowest possible price.
The interest of any commissioned salesperson is opposed to that of the buyer.
Well it looks like inventory reached 4400 today. Also in other news, I see a trend in people NOT using real estate agents to sell homes:
http://www.live-pr.com/en/housemaxx-expands-across-canada-r1048193008.htm
Well it looks like inventory reached 4400 today. Also in other news, I see a trend in people NOT using real estate agents to sell homes:
http://tinyurl.com/6kd2q5
olives said:
When she called his office to see where he was, they informed her he wasn't interested anymore - wtf? Not even a call?
As you said - very rude and unprofessional. Your friend might want to call the agent's firm again and ask to speak to the owner of the agency. Let him/her know that they will be telling this story to friends and associates about this agent and the firm they work for. They won't like that kind of publicity.
Is it just me, or something SERUIOUSLY wrong with this calculator?
http://www.canadianmortgagecalculators.net/rentbuy.html
Island Boy,
yep, something is fishy, the only way I could get a rental result was to plug in 0% appreciation - and that was after I put in rent of $10/month and payments of $2000.
This calculator is the best one I have found:
NY Times rent vs buy.
Posting based on Greg's numbers at cheaprealty.net (Greg, the comments weren't working there).
Looking at the May 16 data vs. those from even three days ago (the 13th), there is a shift of around 40 single family houses from above the median price (854 to 800 13th to 16th) to below median (383 up to 411). Either a large number of houses above median have just sold, or there is a shift in listings from above median to below median. From the comments that Roger, Patriotz and others have been making at Victoria's Truth - that is there are a high number of price reductions occuring, we could be seeing the overall median listing price dropping. This would mean that $/sq ft is dropping, indicating that people are putting less value on housing. The actual median and average selling price may stay high for a bit (depending on the mix that is selling), but the real prices may be dropping - especially considering the overall rising inventory.
An inflection point? Possibly.
dumb_canuck (can't remember my user name or password!)
Hey Dumb Canuck,
you got caught by the spam filter, are you posting from Russia? Just kidding, I submitted your comment as okay, so hopefully that won't happen again.
Thanks for the comment, I think maybe prices are starting to drop too. Let's see if the trend continues....
Well, here's one person with both a sense of humor, and also a bit of exasperation with rents in the Victoria:
http://victoria.en.craigslist.ca/apa/682256449.html
Dirk.
Interesting article on how Realtors are now allowing MLS listings on websites that have FSBO and foreclosure sales.
Seems they realize it's do or die time for MLS and their hefty commissions. I see physical Realtors (or real estate brokers) as a declining industry in which technology will replace them as they offer little value other than information that can be gained from the web.
http://tinyurl.com/5t6ae8
Man the koolaid is still flowing on the Vibrant Victoria RE thread.
Main argument? "The bears have been saying that RE will go down, it hasn't gone down yet, therefore it will never go down".
Where have we heard THAT one before?
That Vibrant Victoria thread is hilarious. Is there a bit of fear mixed in with that denial? LOL
That thread at VV is funny. some of the posters also seem to be stealing and insulting a lot of material from the bear blogs.
Couldn't resist, gave them a posting poke in the eye!
I guess the greenhorn RE agents need a place like VV to keep each others hopes up as the boom turns to bust. Who else could keep posting that crap over and over.
They conveniently forget that people have to buy all these over priced places being built and that construction cost problems can shut these places down in a heartbeat with the credit problems still not anywhere being solved.
Look at Royal Bank writing off $800 million just in this quarter alone,how many more cockroaches are waiting for next quarter.
Another pumper story full of denial:
Resilient Canada safe from U.S.-like crisis
Lead paragraph
It's difficult to imagine what lenders and brokers were thinking when they dreamed up the shaky mortgage products that set off the U.S. housing meltdown.
Reading further
The 2006 changes allowed more foreign mortgage insurers to come to Canada. The arrival of AIG United Guaranty and imminent arrival of other insurers stimulated competition. New products emerged, including 40-year amortizations, 100 per cent financing and interest-only mortgages.
But over the long haul, 40-year mortgages raise a new set of risks for housing and credit markets. "The shock risks from interest rate changes and changes in employment become accentuated if you are using higher-leveraged products," Holt said.
And, of course, there is no free lunch: 40-year terms come with tougher qualifying criteria, higher interest rates and higher mortgage insurance premiums. Then there are interest-only mortgages. These loans let borrowers pay only interest and no principal for the first five or 10 years. This option can be attractive for young buyers with high income-earning potential or borrowers expecting a large inflow of money, from an inheritance, for example.
And now for the denial
Given all these innovations, this is "no longer your grandfather's mortgage market," as Holt put it. But that doesn't mean Canada is headed down the same treacherous path as the U.S.
So it's not enough to borrow from the Bank of M&D you now start relying on them to croak so you can pay off the mortgage.
Dropped by Vibrant Victoria and read an update on Bear Mountain.
Cease selling that dream, and that’s an order
Excerpts:
B.C.’s Financial Institutions Commission has ordered three prominent businessmen to stop marketing condos on Bear Mountain after the necessary paperwork was not submitted in time.
Bear Mountain’s Barrie says there was no attempt to keep the public in the dark. Filing was delayed so that the backers could make sure that they had a handle on their construction costs.
“We’ve been very diligent with our financing,” Barrie told BE. “We’ve just been waiting to figure out what our construction costs will be.”
“You don’t want to borrow $100 million if you only need $85 million.” Barrie said he will try to remedy the situation as quickly and efficiently as possible.“Final costing will be done in 45 to 60 days. All filing (on both projects) will be done concurrently.”
Hmm.. It will be interesting to see how this turns out.
sounds more like a case of "we better try to sell as many as possible ASAP to get a feel for the interest level even though we are flaunting the laws but at least we will know wether to build the place half the size or scrap it all together rather than risk blowing mega millions. Any legal costs or fines will be more than offset by knowing wether we can sell the place out. "
I smell a very shaky market where the rich and famous aren't exactly falling all over themselves blowing millions to buy into wet and soggy Victoria.
Just my own humble opinion of course. ;)
Relisting at a lower price -- I caught one that's still listed:
207 - 1514 Church (The Julia)
MLS#245347
Realtor: Robert Whyte (VIP Realty)
Originally listed $409,900 (Feb 2008), withdrawn end of April, relisted early May, now listed at $379,900. A $30,000 drop, and counting.
Is it just a coincidence that the properties with the biggest drops in asking price are being relisted?
- awum
They can relist all they want. Buyers hve been educated, are watching the market closely, and are no longer fooled by such tricks.
Blogs like this one getting the word out help tremendously too.
But that doesn't mean Canada is headed down the same treacherous path as the U.S.
A steeper one I would say. Calgary and Edmonton have already fallen farther in the first year of decline than any US city other than Miami, and they only started last summer.
Been out of town for a while and get back to see the abomination still for sale across from home depot in langford.Nice to see it has been reduced(would never be enough for me to buy it).But prices don't seem to be dropping a lot,seems people are still expecting to get rich quick for their junk.Funny thing is the only people I have known personally who have bought in the past year are like me,in early thirties,doin the 40 year mortgage and or bank of mom and dad.They too expect to do some renos and flip.or have bought new condo and expect to make a ton of cash in 5 years.There has to be some creative financing going on because i make a decent dollar and still wouldn't want the mortgage payments and strata fees that i see them paying and starting to panic about already.I really don't see how the local market will crash,probably level off but not be anything like the states.their foreclosure laws are different and most people i know will do anything to keep the house of cards going.Of course who is left to buy?Not any smart first timers and even now the banks are tightening credit so I'm thinking it will dip a bit then settle to a status quo as people won't be able to afford to get rid of the home and suck it up,trying to ride out the storm.
Polecat,
Flattening out is not a likely outcome. Just look at this chart. You might think it will plateau like it did in the past but today's market is different. There has been much more speculation, stretched financing, exuberance and rapid annual price increase than in previous years.
Today's market has been built on high expectations and cheap, easy to obtain credit. After a few months with little price change prices will drop for several reasons:
1. Speculators and flippers will unload as fast as they can because they realize prices have peaked. This extra inventory and motivated sellers will have a downward effect on prices.
2. First time buyers will no longer feel the pressure to buy and when they start thinking of better deals in a few months they will sit on the sidelines. Fewer buyers - more downward price pressure.
3. Current owners will begin to feel increasingly uncomfortable with heavy mortgage payments once they realize prices are no longer going up. The house will no longer be viewed as an investment but simply as a place to live. Their renter friends will continue to pay less for accomodation and have more disposable income and ability to acquire true investments (GICs, stocks etc.). Some will sell, especially if their house is now upside down (mortgage exceeds market value.)
4. Astute buyers who have seen it all before and will sit on the sidelines as well. Who wants to catch a falling knife?
5. Developers will be left holding a bunch of housing stock (especially condos). These guys have to sell and will cut prices to whatever level necessary to make a sale. More downward pressure.
6. The inflation monster is just around the corner. Our strong dollar has saved us up to now but that is last year's story. Rising oil and food costs, coupled with increased labour costs will push the CPI beyond 2% before long and the BOC will start raising rates. All those variable rate folks will see their mortgage payments go up. More pressure to sell and less motivation to buy.
I really don't see how the local market will crash,probably level off but not be anything like the states.
So why did Alberta start crashing last summer with a much stronger economy, better affordability, and no US recession yet in the cards?
Let's hear your explanation.
Well patriotz,really don't know.no expert in real estate,don't even own a house,but some land back east.Guess every market can only take so much,and breaks.I see the point about inflation,gov numbers are truly skewed.you can buy a 400000+ house in sooke but you still have to drive in town to work at 1.35 a litre,i know i can't do both.
Well here's your answer:
More housing built than people can afford to buy
If prices are well above normal, fewer people will be able to buy, but more housing will be built.
Supply and demand. That's all there is to it.
People say at the time it is hard to call a trend, 20/20 vision is better in hindsight, all that.
I disagree, any bets on whether the median will fall in May?
28 million dollar plus sales in April was an unusually high number, enough to push the median up almost $30,000.
This month it resumes its march back down....
People say at the time it is hard to call a trend,
Hard to call a trend? That's like saying it was hard to call a trend in WWII in mid-1944.
The global housing bust is closing in on BC on all fronts - Alberta to the east and the US to the south.
Already listings are ballooning all over BC. The rush to the exits is on.
This time next year there will be blood on the streets.
Decline in U.S. visits has tourism firms pulling out all stops
Number of travellers hits an all-time low
Move along folks, nothing to see here.
A woman with a bed & breakfast in Victoria recently told me that they are all concerned since there is a huge decline in customers this year.
We're sure as hell not coming this year, after coming up the past two years. Why would we? With gas and food so high, and the bottom not in yet.
No, we're just sitting and waiting for the house we picked out two years ago to hit reality.
Like a brick wall. Our roadkill shovels are right at our fingertips.
And we're just the tip of the iceberg. Now or later, it makes no difference to us other than we'll make out even better later.
Tick... tick....
Good luck with the SF direct flight. With the US airlines cutting capacity (American is cutting 12% in an annoucement today), that UA flight to SF will never happen. Plus, Victorian are too cheap to fly, the route would never be viable anyway.
anon 10:55 said:
We're sure as hell not coming this year, after coming up the past two years. Why would we? With gas and food so high, and the bottom not in yet.
No, we're just sitting and waiting for the house we picked out two years ago to hit reality.
Just curious. Coming up from the USA? Why buy up here when you get a better house for less money just across the border?
The usual reasons, I imagine. It's not just about money when you get to our age.
President Obama or President McCain. Either will do, they're both NaziGOP and we're tired of funding their profiteering wars. I'd rather pay quadruple the taxes to fund a government I believed in (even out of newbie ignorance) that was at least smart enough to stay the hell out of Iraq.
President Hillary, on the other hand, will give us a bit more time to time the bottom, although we've had it with the US and its suicidal bankrupting war criminal military-industrial complex. Screw me once... one Viet Nam per lifetime was too much.
We quit being Americans in our hearts on 9-11. A government that would do that to make a buck is no country we want any part of, and we KNEW they did it from DAY ONE.
anonymous--Not to make this into a political board but I am of the opinion that with a new government in place and the slow recovery of the economy helped by the weakness of the US buck the USA is poised for a major recovery and a return to its former status as a legitimate world leader.
Your personal situation will determine your actions but trust me, the clowns and incompetents (on all sides) running our country dont exactly inspire confidence either.Realistically,much of our bestlegislation and many of our institutions take their lead from America. In any case,if you do come here, for the reasons stated, you will be welcomed by most Canadians.
(OT--The RE market is poised for a fall.)
We have had enough American speculators who have driven our RE prices sky high (and are trying to unload now) here. We don't need any more illegal immigrants here who don't pay our taxes but who want the Canadian citizenship as a matter of convenience. Let our own people live and afford a home at a realistic price.
anon May 22, 2008 11:21 AM
We have more than enough home grown speculators doing the job, no need to start bashing another country that is really a tiny minority of the buyers here.
We have had enough American speculators who have driven our RE prices sky high
Americans account for very few RE purchases in BC, even in Victoria where there are a lot more than elsewhere (except Whistler).
It's the locals who are responsible for the price runup. If no locals had been willing to pay these absurd prices, it would not have happened. There just aren't enough other buyers,
boomer:
>>with a new government in place
>> and the slow recovery of the
>> economy helped by the weakness
>> of the US buck the USA is
>> poised for a major recovery and
>> a return to its former status
>> as a legitimate world leader.
I wish it were that easy, and that one election could erase the idiocy that has been the last eight years of the Bush government.
However, although a Barack win may temporarily lift the markets, once the honeymoon is over there is a very real set of problems that will not disappear overnight.
For example, Bush borrowed more money as President than all other U.S. presidents combined.
There are reasons the U.S. buck is so weak. If professionals in the currency trade business thought the U.S. dollar is worth more, they would be buying it and pushing it's value up.
How are federal, state, and local U.S. governments going to cover $531,472 per household in long-term financial obligations?
"We’re running deficits in the trillions of dollars, not the hundreds of billions of dollars we’re being told," says Sheila Weinberg, chief executive of the Institute for Truth in Accounting of Chicago."
http://housingdoom.com/2008/05/19/you-are-more-in-debt-than-you-think/#more-1386
>>We have had enough American
>> speculators who have driven our
>> RE prices sky high
So you are okay with the Canadian speculators? (I'm not!)
Whether they are Americans or not, if they are planning to live in settle in the home they buy, they are more than welcome!!! If they are mere flippers, regardless of citizenship they are not.
Anyone remember this REALTOR® from north of the Malahat?
B.C. man's drunken flight ends with assault plea
Will he lose his real estate license?
Doubt it that he will lose his licence. The real estate industry is full of dishonest crooks and criminals.
If Gordon Campbell doesn't lose his job for a felony, you can bet that ass won't either.
Holy S***!
Inventory reached 4510 today, it's increasing at a rate of 110 listings per week!
At this rate, it will only take 49 weeks to reach Calgary's 10,000 and that city is ~ three times the size.
How about giving a break to the disenfranchised Mexicans? They are hard working and humble. The US government doesn't seem to value their contribution to their econommy, with that wall they're putting on the border and the crack down on employers. I think we would benefit from some Latin groove here, it would make this city less rigid, more humane. Better than bringing people with big money. It would take our minds off of all speculation and what's my house worth kind of BS. Perhaps, we should open our doors to the 1/5 million homeless in China (they are humble and hard working too) as well. Isn't there a process we that will let immigrants that are really in need to come here, or is it the old adage that money talks?
Isn't the 10,000 figure in Calgary related to SFHs only?
Thanks for the welcome, Boomer.
Anonymous 11:21, who said a thing about speculating and coming illegally? Buying one place to live in, and applying for Canadian citizenship, and furthermore, waiting until the bottom is in to do it, isn't going to hurt anyone in Canada. But thanks for the fairly mild xenophobic response compared to the usual spiel on Craigslist Vic rant and raves LOL.
Thanks too to Anoymous 12:22
Anonymous 5:16, money might not talk, but it sure is a heckuva less drag on social services. Once America becomes fully third world in a decade or so, Canada will get its share of Latinos, have no fear. Barring another Clinton miracle, that is.
For anybody waiting for the U.S. economy to recover, here is a nice little uplifting MarketWatch article:
"Megabubble waiting for new president in 2009"
...
"the use of deceptive statistics has played its own vital role in convincing many Americans that the U.S. economy is stronger, fairer, more productive, more dominant, and richer with opportunity than it really is. The corruption has tainted the very measures that most shape public perception of the economy," especially three key numbers, CPI, GDP and monthly unemployment statistics.
...
"Based on the criteria in place a quarter century ago, today's U.S. unemployment rate is somewhere between 9% and 12%; the inflation rate is as high as 7% or even 10%; economics growth since the recession of 2001 has been mediocre, despite the surge in wealth and incomes of the superrich
...
The biggest of all lies is with inflation. Understating inflation "hangs over our heads like a guillotine," says Phillips. Yet if Washington told us the truth "it would send interest rates climbing and thereby would endanger the viability of the massive buildup of public and private debt (from less than $11 trillion in 1987 to $49 trillion last year) that props up the American Economy." So we keep sipping the Kool-Aid.
...
http://www.marketwatch.com/news/story/governments-numbers-racket-about-blow/story.aspx?guid={F91A0843-69B4-4C0C-92CE-B835D9907945}&dist=MostReadHome
anon 6:00 PM said:
Buying one place to live in, and applying for Canadian citizenship, and furthermore, waiting until the bottom is in to do it, isn't going to hurt anyone in Canada.
You will find the vast majority of Canadians welcome folks from the US either as tourists or as immigrants. If you are thinking of moving here permanently in the future you might want to contact an immigration lawyer before too long. You can buy property but without immigration approval you will be a non-resident.
Non-residents in Canada have the same restrictions as in the US: 6 months max stay in any 12 month period and no benefits (i.e. health care). They dropped the retired immigration category years ago so you now have to be an investor, worker, self-employed professional or married to a Canadian in order to be considered for an immigration permit. Processing times vary but can be quite lengthy.
American Anonymous - gas and food is always much more expensive up here, that won't change. It's funny reading U.S. blogs that complain about the prices of gas and food lately - when really they are getting a great deal compared to everyone else in the world!
Thanks olives. We know it's MUCH more expensive, we've spent months there. But to us it's worth it in the long run to not have to fund the war industry in the States.
Well, once we get our price, like anyone else!
Thanks.
Thanks Roger. We've bought all the books, done all the research, so we're not planning to squat our way in. We have a very solid plan.
Thanks!
Big news: Royal Bank says housing boom is ‘over’
Canada’s long-running housing boom has ended, with the formerly bubbling markets of Calgary and Edmonton already having gone from hot to not, and with the current hot spots of Saskatoon and Regina to follow, a major Canadian bank says.
Mortgage-market innovation delayed the inevitable but couldn’t prevent it, Royal Bank of Canada said in its analysis of major urban real estate markets Thursday.
“After yet another blockbuster year for Canada’s housing markets in 2007, the much-anticipated housing market slowdown in Canada has arrived,” RBC said.
“The delayed arrival of softer housing markets can be partly attributed to recent mortgage innovation that has seeped into the Canadian market during the last two years,” it said, citing higher loan-to-value ratios and longer amortization periods of up to 40 years, which opened the market to a wider range of buyers and prolonged the housing boom.
The mortgage-market innovations, which make housing more affordable in the short term, also heighten the risk of default in the long term, it said.
Markets in the West, which have risen the furthest above their underlying values, are the most at risk of an increase in defaults as a result of recent mortgage innovations, the report’s author, RBC economist Amy Goldbloom, said in an interview.
However, there will not be a U.S.-style correction, despite such concerns in markets like Calgary and Edmonton, said the report, released amidst further evidence of the depth of the U.S. housing market meltdown - a record drop in a government index of housing prices in the first quarter of this year.
“Canada’s housing market is on much firmer footing than the U.S. market,” it said, citing more conservative mortgage lending practices, healthy household finances, tight labour markets, and a manageable supply of homes on the market.
Still, after six years of 10 per cent or better house price increases in major markets and four years of annual construction starts of more than 220,000, Canadian housing markets are now on a clear cooling path with resales last month being down six per cent from a year earlier, price gains from a year earlier slumping to the three per cent range, and the number of homes being listed for sale surging by 18 per cent.
“For the year ahead, we’re looking at price gains to converge across the country to a much slower pace, with the West cooling off from double digits and central Canada cooling off further to the low single digit range,” Goldbloom said. “By year end we expect most markets will be eking out mild price gains.”
“The markets that soared well above their underlying economic fundamentals are the very ones with the most downside potential,” the report said. “Calgary and Edmonton have moved from chart-toppers to bottom-of-the heap in only a matter of months on a range of key housing market indicators, including house prices and sales.”
Saskatchewan has since jumped into the housing market spotlight as its commodity-led economic expansion has attracted an influx of migrants and led to a major housing market boom, it said.
“Regina and Saskatoon continue to clock year-over-year price gains that are several multiples above the pace of their local wage growth,” it noted. “This lends evidence that current momentum is unsustainable, with a similar fate to Alberta’s likely for both of these cities in a year’s time.”
Meanwhile, many of the middle-of-the-pack markets, such as Toronto, Ottawa and Montreal, are maintaining their slow and steady growth, with housing prices across much of central and eastern Canada still five to 10 per cent above year-earlier levels, it said. However, more moderation is in the cards for those markets as well this year as sales slow, prices continue to cool, and new-home construction levels off from extremely elevated levels.
The bottom line is that while prices will still post modest gains this year, after a six-year run sellers will lose some bargaining power with the degree of power lost varying from region to region, RBC said.
Funny no mention of Victoria in here and even more funny, no ridiculous is the attempt at trying to downplay the imminent and hard downturn.
Prices will post modest gains????? All I see is reduced signs all over the place, increased inventory, and even a foreclosure or 2.
Soft landing....Ya I don't think so
Honestly, Canada is the last place in the world you should move to. We have a declining population and will have more and more entitlements to pay for as our baby boomers retire. Oh wait I guess you just want to add to the burden nevermind then.
However, there will not be a U.S.-style correction, despite such concerns in markets like Calgary and Edmonton
Calgary and Edmonton are already undergoing a US-style correction, and Vancouver and the rest of BC look like they are just starting one.
Bozos.
Unsold houses on U.S. market hit 23-year high
http://marketwatch.com/r.asp?g=D9F5C9AFD0F54ABEB378DEA30CC4FB59&d=bnb
There reference to Vancouver (and Victoria) in that article is that to the "west, which have risen the furthest above their underlying values, are the most at risk of an increase in defaults as a result of recent mortgage innovations".
Obviously they are refering to Vancouver (and Vic etc.), but for some reason REFUSE to name us, although they name every other bubble location in Canada????? Is it because it is well known fact by these bankers that we are in a far worse and "unmentionable" situation out here?
"Honestly, Canada is the last place in the world you should move to. We have a declining population and will have more and more entitlements to pay for as our baby boomers retire. Oh wait I guess you just want to add to the burden nevermind then."
Fair point actually - it'd be a shame if Americans were retiring up here, having not paid the higher Canadian taxes their whole life, to take advantage of the public healthcare system here.
"Obviously they are refering to Vancouver (and Vic etc.), but for some reason REFUSE to name us, although they name every other bubble location in Canada????? "
we are the last man standing and to take potshots at "The Olympic Province" would be most unsportsmanlike would it not ?
The guy probably owns a few vacation spots out here he's trying to unload,lol.
Anyone have any data on the cost of building a house in the area? No I'm not in RE but I'm starting to entertain the idea that I could find some fair valued land out of town and build a small house to live in. I can build one myself, but I cant seem to find any current info with cost of materials.
Anyone have any idea what the current costs are?
anonymous 10:40
One option is to get in touch with Harvest homes just north of nanaimo. They have a catalogue of many cedar homes AND a guaranteed price to lock-up or complete.
Very popular around here(ie north of the malahat)and pretty good value--and you know up front what its going to cost
$150/sq ft approximately......Ya I know it makes you want to vomit!
Keep in mind, land prices will be coming down too. personally I would wait as there are going to be a lot of lots available very soon AND a lot of hungry contractors willing to do the work for less than $150/sq ft.
Agreed - there is no fairly valued land on the island. The only cheap land (e.g. $10k an acre) is up in places like Woss, where land is so plentiful it's literally worthless.
Try to buy an acre in the boonies anywhere near here, e.g. Jordan River (the middle of freaking nowhere!) and you're looking at $150k. That's insane, when fair value for a house in Victoria is $250k. That remote land will plummet in value to the point that it is indeed worthless - nobody wants to live in Jordan River, much less Woss. And they'll want to even less when land in Parksville or Duncan is cheaper than what you paid for a bare lot in Jordan River.
anon 6:00 PM said:
Buying one place to live in, and applying for Canadian citizenship, and furthermore, waiting until the bottom is in to do it, isn't going to hurt anyone in Canada.
It is unless you plan on working here and contributing taxes like everyone else. Fortunately, the Conservative government has introduced an immigration reform bill that will favour immigrants who contribute economically to the country rather than people who sponge off other Candaians' hard work and lifetime taxes. It sounds like you are in the latter camp so I wouldn't hold your breath waiting for a Canadian citizenship and full slate of entitlements paid for by other people.
BTW I gather you are one of those kooky 9/11 conspiracy theorists (it was perpetrated by the US government, etc.). If so, stay away, we have enough loonies here already.
Anonymous 8:36, you (and we) will pay for every bit of those entitlements with our higher taxes. No one's getting a free ride anywhere. Everyone pays for what they get.
Chill. Really, you won't even know we're here.
Anon 1:32, OF COURSE we're going to work and pay taxes. And as far as not having paid them our entire lives, I think the $500,000 they're asking us to invest in the province for citizenship in our particular class (on TOP of what we eventually pay for a house) will make up for SOME of those taxes.
So really, chill. And as for the 9-11 conspiracy crack, I think you need to look at current polls of what the majority of Canadians believe; you'll find yourself in a very tiny minority. Work for the gov by any chance?
And as for the 9-11 conspiracy crack, I think you need to look at current polls of what the majority of Canadians believe; you'll find yourself in a very tiny minority.
Baloney. Most Candians (and most Americans)realize 9-11 was the result if Islamo-fascist hatred of the west, not a CIA plot.
I think the $500,000 they're asking us to invest in the province for citizenship in our particular class (on TOP of what we eventually pay for a house) will make up for SOME of those taxes.
No it won't. None of that money represents taxes. You are stil grabbing a free ride on the backs of tax paying Canadians. Stay in the USA and promote your 9-11 theories there. We don't want you here.
Woss?
American Anon - that "other" anon does not speak for me. I thought that "911 conspiracy theory" was historical fact to most Canadians (maybe it's just everyone i know?)
I'll welcome you anyways, and even moreso if you don't take part in increasing real estate values by purchasing now. :)
Housing prices drop in Calgary for the first time since 1996.
All five of the countries most active markets trending higer.
http://tinyurl.com/69rpe7
I meant to say listings trending higher
What would it take to immigrate to the US? Do they also have an "investor" program where you bring $1/2 (I could buy a bunch of condos in Phoenix for moneylike the Chinese/Koreans/Nouveaux Riches Russians/etc do when they "invest" in Vancouver).
I'm looking to move to Phoenix (tired of the socialist government in BC, the excessive crime and druggies/bums in Victoria and the high taxation rate). Is there such a program?
Love you much, olives... don't worry, I know the xenophobic anon(s) work as cons in gov and we listen to them not a bit. On the contrary, I find them hilarious and a bit pathethic in their desperation to sell an obvious lie they in all probability can't even believe themselves.
I'm actually looking forward to retiring from politics though and being able to keep my big mouth shut for the rest of my days. The cons gov there has nothing to fear from me.
Nor fellow bears, because I'm NOT buying until the market bottoms out either.
The NAU, on the other hand.... ;)
Anonymous 5:07, I think most Canadians would welcome you leaving. And about 18% of the US would welcome you with open arms (those are Bush's and his wars' current approval percentages, right?)
Don't forget to take your kids with you too to enlist in the armed forces of the US "to fight them over there so they can't attack you down there."
Oh. And you're just going to love President Hillary.
So is that why the RE market in BC has rocketed out of reality. I remember in the 90's something about the "immigrant investor" class to accomodate fleeing Hong Kong Chinese to move to Canada (when China was to take over HK). At the end of the day, what did that accomplish? What constitutes investment for the government? Is RE a qualified "investment"? By investing their $500,000 into Vancouver RE in 1992 and stimulating the local RE to move upwards and robbing locals of the ability to buy at prices based on local fundamentals and wages. I believe the number one reason why Victoria RE is overpriced is not the Alberta, not the US buyers, but the people from Vancouver who have come here to do the same they did there with the flipping of RE and crap.
Is there an investor class immigration for the US? How about one to move to China?
Anon 5:31 PM
I bet you never have in the US. You must have a criminal record then. You are so pathetic with your rant about the war? Who is talking about war? Are you some kind of an illegal alien, hippie Vietnam draft dodger? If you hate the US so much, then move to Cuba or North Korea or China. Without the US, Canada would have become a territory of Japan and Europe would have been German. You stupid idiot.
Anon 5:59, next time try to post in English and in complete sentences so you won't look so rabid.
And make sure you take your daily meds first.
And if you love the US so much, why aren't you already there? Real estate values favor YOU emigrating THERE.
Go for it, you won't be happy until you do.
But be prepared to pay for your own mental health care, and it won't be cheap.
Anon 5:48, let me correct some of your erroneous assumptions.
When an investor comes to Canada in a certain class, they give the GOVERNMENT $500,000 to do with as they want. It has nothing to do with real estate, driving up prices, flipping, or anything else. It might even have gone to some of YOUR social services and/or infrastructure.
The gov doesn't flip or invest in real estate. At least they damn well shouldn't be, or they're going to be eating it very soon.
Private investors (most of them LOCAL realtors) buying houses and condos to flip are why real estate has bubbled. Also last minute private speculators, many local, from trying to get in on the action.
So thanks for trying to find a xenophobic peg to hang the bubble on; it doesn't wash.
When an investor comes to Canada in a certain class, they give the GOVERNMENT $500,000 to do with as they want.
You left out some details. This is what the gov't web site says.
The Immigrant Investor Program seeks to attract experienced business people to invest C$400,000 into Canada’s economy. Investors must:
-show that they have business experience
-have a minimum net worth of C$800,000 that was obtained legally and
-make a C$400,000 investment.
Your investment is managed by Citizenship and Immigration Canada (CIC) and is guaranteed by the Canadian provinces that use it to create jobs and help their economies grow.
CIC will return your C$400,000 investment, without interest, about five years and two months after payment.
So an immigrant investor is lending the gov't $400,000 interest-free. However, it's guaranteed, so the value of the "investment" to Canada is actually quite small.
I'm not sure why the gov't continues to offer this. It is nothing more than a back door into the country for moderately well-off people who want to come here and sponge off the system. There is no requirement that an immigrant investor gain employment and pay taxes. They can sit around and do nothing, and then take their $400K back at the end of 5 years, and keep the passport. Canadian passports for sale: $100K (opportunity cost of $400K for 5 years). And for that you get lifetime medical, OAS, etc!
From the gov't web site
Currently, the majority of investors are from China, Taiwan, Korea and Hong Kong, but there are also substantial numbers of investors applying from the Middle East and elsewhere.
This is how the people in Lebanon and Hong Kong get their "passports of convenience." Now the Americans want in as well!
Most Candians (and most Americans)realize 9-11 was the result if Islamo-fascist hatred of the west, not a CIA plot.
Who trained Osama Bin Laden to be a terrorist leader? The CIA, of course.
You are right about "Islamo-fascist" hatred but didn't mention its sponsors - those good buddies of the Bush family, the rulers of Saudi Arabia - home of Bin Laden and 3/4 of the 9/11 hijackers, financiers of the Taliban, promoters of Islamic extremism.
Anon 7:17 PM. Thanks for the shedding some light on how this "investor immigrant class" scam works. It is unbelievable and really cheapens the value of what it means to be Canadian. They get a passport of convenience, never pay taxes as they live and work in their home countries and then soak up all the benefits of our public health care system when they're sick or when they retire. Nice.
Fair point actually - it'd be a shame if Americans were retiring up here, having not paid the higher Canadian taxes their whole life, to take advantage of the public healthcare system here.
Americans (as well as Canadians and others) are retiring where ever they can survive on their fixed incomes.
Who wants to spend their winters in Edmonton let alone Victoria?
http://www.youtube.com/watch?v=xgl9M8O_PEQ
Anon 7:17, if that's what you've gleaned from my posts, then you obviously haven't been reading. I agree with you there should be a residency AND property ownership AND tax requirement for ANYONE "buying" citizenship via any investor class. Furthermore, we intend to be putting at least $300,000 in renos into the local market in our three quarter of a mil "fixer upper". And living here. And working here. And paying taxes. As I said, we want to pay taxes to a smarter gov we happen to believe in.
I feel and agree with your anger toward those who may not live here but buy passports of convenience. But I have to think most of those do so for the ease of doing multinational business here. I think the situation of some rich foreigner who can afford to live somewhere else coming here for the "excellent" "free" medical care once they age would probably die in the queues FIRST, and will more likely be paying for cheap medical care anyplace else, like in Thailand or Mexico on a great vacation getaway.
I think it far more likely that all those empty condos are owned by Canadian speculators, real estate agents, and the rest, graduates of some fly-by-night hotel convention room "Real Estate Millionaire" course and hard core viewers of real estate crack shows like "Flip This House."
Of course, it's always nicer and more convenient to not blame our fellow citizens for our problems but blame others, even if we have to make them up out of thin air.
patriotz said...
Who trained Osama Bin Laden to be a terrorist leader? The CIA, of course.
You are right about "Islamo-fascist" hatred but didn't mention its sponsors - those good buddies of the Bush family, the rulers of Saudi Arabia - home of Bin Laden and 3/4 of the 9/11 hijackers, financiers of the Taliban, promoters of Islamic extremism.
patriotz, you rock! You're why we love Canada. Bin Laden was on the Bush payroll until the day he died of liver failure.
Thanks!
I feel and agree with your anger toward those who may not live here but buy passports of convenience. But I have to think most of those do so for the ease of doing multinational business here.
Wrong. The thousands of Lebanese who got a free ride out of Beirut two years ago were living over there and used their Candian passports as insurance. We are suckers in Canada for paying tens of millions to bail those parasites out.
...coming here for the "excellent" "free" medical care once they age would probably die in the queues FIRST...
You are obviously contemptuous of this country. Remind us again why you want to come here? So you can fling insults at the government after you've purchased your passport?
patriotz, you rock! You're why we love Canada.
Moron. If the USA shit down the border 75% of candians would lose their jobs. You anti-Americanism illustrates you pitiful ignorance.
Absolutely. Those Lebanese lived there and asked to be bailed. What a joke! Bring on the ships. The same would happen in Honk Kong, Taiwan, wherever if China decides to tighten the reins there.
I've lived in Victoria all my life and we have always enjoyed good relations with our US neighbours. I don't know anyone in this city that harbors any hatred for them. In fact, our tourism industry depends on them. Are you guys posting from Victoria or do you live some place in the middle east?
Americans will always be welcome here and when we travel to Seattle, Portland, Las Vegas and other cities we are always welcomed there. I have never experienced any Americans spewing hatred towards me as a Canadian.
On another note, I don't know why we talk about US politics on this blog? I don't even know how the US government works with the Senate, Congress, etc. Frankly, most people don't even know how our system works. I wouldn't know the names of any of Harper's ministers and for that matter I don't even know the names of the premiers of Alberta, Sask,... all the way to Newfoundland. I know it was Ralph Klein not long ago and Charest in Quebec. But the rest, we never hear of them. I would rather want to know more about how Canadian policies negatively impact the ability of young families to afford homes in Victoria.
""Americans will always be welcome here and when we travel to Seattle, Portland, Las Vegas and other cities we are always welcomed there. I have never experienced any Americans spewing hatred towards me as a Canadian. ""
Absolutely right--many Canadians seem to have a problem differentiating between the American PEOPLE and the neanderthal American
GOVERNMENT.
I have travelled extensively in the States and have been made to feel even more welcome as a Canadian. .
Would you kneejerk anti-americans like to be trashed for some of the boneheaded policies of the Harper Government? (Assuming anyone in the world cared enough to bother)
grow up
You anti-Americanism illustrates you pitiful ignorance.
I am pro-American. Americans like Jefferson, Lincoln, Teddy & Franklin Roosesvelt, FDR, Eisenhower, and JFK.
Not the current clown in the White House and his gang of traitors.
I've met over the years a few (very few) people in Victoria that were anti-American. These people are usually disgruntled, frustrated and bitter about anything and everything. One such Victorian hates the Americans with such zeal because he was arrested for smoking pot at a bus shelter and possesion in Santa Barbara and spent some time in jail there (in the 70's). He can never return to visit.
You can see them sometimes walking down the sidewalk scowl faced puffing away cigarettes and unhappy with their BC social housing pads. They seem to be resigned for the rest of their lives to wallow in their misery and hatred. They are ones who also opposed bilingual packaging, hate the French and complain about "all those immigrants and foreigners" that have moved to Vancouver. The pot smoking loser I mentioned above is one example of someone who hates immigrants and French Canadians. He said once that he did not get a federal government job because he did not speak French and has hated the French since.
Those people with bigotry and hatred go to your skinhead and racist blogs or get some serious psychological help.
Is that Farley Mowat your talking about?
M. Patriote:
Do you know any of our Canada prime ministers and premiers? Can you tell who was good according to you? Do you know (or heard) of any our Canadian political figures like Tachereau, Duplessis, Levesque et Robert Bourassa? What is Jeffersons (TV show??), FRD, etc? I've never learned that in school? I'm originally from Montreal, we were taught about Quebec, la rebelle des patriotes de 1837, la revolution tranquille, Canadian history, etc but nothing about foreign countries (maybe about Charles de Gaulles). Are from Canada?
I'm sorry I started such a mess, it was not my intent. I'm going back underground now and will only comment and post real estate stuff.
In closing (and I think ALL of us can agree on this) Democracy can be messy. Be glad we have a real one in Canada and full sovereignity and may it ever be so; other countries aren't quite so fortunate.
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