Real Estate Talks

Harahomes · Sat Jul 15, 2017 11:25 pm

The combination of rising interest rates and appreciating Loonie will be disasterous for Canadian housing.
Im not sure if will be disasterous, but it will have an effect. I think the bigger problem will be the NDP provincial policies
Which specific policies do you think will be a problem?

The Green party and NDP both campaigned on the following ideas and are set to put into place some of these policies if not all. Maybe they will change their stance now that they are in power. It will be interesting to see what they put into place and how this will affect the surplus they are getting from the PTT. Should be an interesting few months!

•a new sliding scale for the property transfer tax, starting at 0% for homes of $200,000 or less, rising to 12% on properties valued at $3 million;
•doubling the foreign-buyer tax to 30% from the current 15% and extending it across B.C.;
•a capital gains tax on principal residences valued over $750,000; (this particular policy will hurt wealthy Canadians the most)

Geyser · Sun Jul 16, 2017 5:14 pm

You're asking the wrong guy jimtan.
I'm on an oversized lot. A downgrade for me would be a 33x122 detached. That's a dream home if you own anything below a detached. Ask townhouse, condo owner what they upgrade to. My situation is quite different.
Right! Your crack shack on the East Side is the ultimate home!

Who cares to join the cretins in Dunbar or Kerrisdale? Or Shaughnessy?

Reality check. I really have to side with Jimtan on this one.

To put things in perspective I checked up on ETB's old crack shack and found the following information (I deleted the address because I respect people's privacy and I don't think it should be published except by him)

The postal code is XXX XXX. The land value in 2016 is$1,221,000. The improvement value in 2016 is$67,400. The property is built in1939. The property zone category is One Family Dwelling. The legal type is LAND. The total assessed value in 2016 was $1,288,400

Given the fact that recently, Vancouver detached home prices have been steadily falling while condo prices have been and still are rising, Jimtan's former condo on North False Creek is probably worth a very similar amount to ETB's badly located old timer.

ETB, do you really believe that people who are currently buying well located, luxury townhouses or luxury condominiums for well over $1,000 per square foot are secretly dreaming of downgrading to a tired old house in a distant and somewhat shabby suburb?

How much per square foot did that new cardboard McMansion next door to you sell for? How much would even a poorly designed and probably hurriedly built box like that sell for on the far more desirable West Side?

When you make silly comments about detached being more desirable than townhomes and apartment condominiums please remember that all those types of housing come in many different sizes, build qualities and, most importantly, locations.

The prices and desirability of each category can vary dramatically. If your old house was on the water side of Point Grey Road the land would be worth a helluva lot more than $1,221,000. Similarly, if Coal Harbour's Fairmont Estate condos were located in your postal code they would be massively cheaper than the multi-million dollar price tags they currently command.

Do you really believe the residents in that Fairmont building dream of "upgrading" to a much cheaper tear-down in the rough end of the city???

BTW, when viewed on Google Earth, your supposedly "oversized lot" appears to be exactly the same as almost every other lot in the neighbourhood.

eyesthebye2 · Sun Jul 16, 2017 6:09 pm

It's the land man. Those who don't have it are always looking for it. Ask jimtan

You know what a Vancouver property without land is?
Fools gold

Geyser · Mon Jul 17, 2017 1:47 pm

It's the land man. Those who don't have it are always looking for it. Ask jimtan

You know what a Vancouver property without land is?
Fools gold

You do Realize that detached homes, townhouses and other condominiums are built on land do you? Or do you still think they are suspended from skyhooks?

Do you also realize that land in the western side of the Downtown peninsula will be worth many multiples the value of one of many, many, thousands of similar lots in a distant, shabby suburb. It's not because of what's already built on it, it because of what can be built on it in the future.

Check this out from last year, before condo prices took off:

Wall Financial paid $16.8 million for 1059 and 1075 Nelson in Sept., 2013, but 30 months later sold it for $60 million. Then the properties were sold to another wealthy immigrant, Gao Shan, for $68 million.Which means two nondescript three-storey walk-ups increased in value 400 per cent in two-and-a-half years

For strata or co-op owners, the advantage of selling is that you can sometimes get $1 million or more for a unit that might be appraised for half that on the market. This can be appealing, especially for buildings that are in need of repairs.

Just imagine If you had bought into those apartments with the same amount of borrowed money you put into you poorly located old house. You could have enjoyed a 400% increase in value and with that, you could have then "upgraded" to another old fixer-upper in your preferred rough area, you could have been mortgage free and still had several hundred thousand bucks left over for bringing it up to a nice standard. But of course you didn't because you don't understand the value of "location".

Your old fixer-upper was prime for a land assembly until the new McMansion went up next door. Now only your place and the corner house next to you are financially viable candidates for assembly. Two lots are not big enough for anything really interesting. Previously your side of the street was prime for tear down and being replaced with social housing similar to the older, "low income development" on the next block, but your new neighbour has just screwed that opportunity.

Never mind, now I've told you how this game works, you can do better next time by just remembering ...... it's not only about the land, it's mostly about "location, location, location". Otherwise we would all be buying land 50 miles North of Kamloops for its investment value. Lol.

eyesthebye2 · Mon Jul 17, 2017 2:51 pm

that's great Geyser. You have as much confidence in your position as I do in mine.
Let's agree that we disagree with each

reallyreal2 · Tue Jul 18, 2017 8:29 am

All I know ETB is that you have been wrong about the stock market and condo prices in the lower mainland.

What else do you think people should not invest in? I want to get in quick!

Geyser · Wed Jul 19, 2017 3:03 pm

that's great Geyser. You have as much confidence in your position as I do in mine.
Let's agree that we disagree with each

Well that was a compelling rebuttal of the widely reported facts. Lol.

semven · Wed Jul 19, 2017 3:44 pm

"Your old fixer-upper was prime for a land assembly until the new McMansion went up next door. Now only your place and the corner house next to you are financially viable candidates for assembly. Two lots are not big enough for anything really interesting. Previously your side of the street was prime for tear down and being replaced with social housing similar to the older, "low income development" on the next block, but your new neighbour has just screwed that opportunity."

Need to look at the whole block to qualify that statement Geyser.

If the lot sizes were reduced on the other homes on the block, then ETB and his neighbor are in (or will be in) an "arranged marriage"

If the new build is on a lot size akin to the other homes on the block, then it is no harm, no foul.

Color me bearish. I think we are on the eve of a Royal Shitshow anyway....

eyesthebye2 · Thu Jul 20, 2017 8:28 am

$Cdn going up makes Vancouver more unaffordable internationalĺy.
Interest rate hike.
Inventory increasing.
I see some softening if the trend continues.
These are all short run. I don't expect price decreases longer than 6-8 months.

For long term look at immigration. If Canada continues to add 250,000 to 300,000 every year then prices can only go up in the 2 primary destinations; Toronto and Vancouver.

eyesthebye2 · Thu Jul 20, 2017 11:10 am

"Your old fixer-upper was prime for a land assembly until the new McMansion went up next door. Now only your place and the corner house next to you are financially viable candidates for assembly. Two lots are not big enough for anything really interesting. Previously your side of the street was prime for tear down and being replaced with social housing similar to the older, "low income development" on the next block, but your new neighbour has just screwed that opportunity."

Need to look at the whole block to qualify that statement Geyser.

If the lot sizes were reduced on the other homes on the block, then ETB and his neighbor are in (or will be in) an "arranged marriage"

If the new build is on a lot size akin to the other homes on the block, then it is no harm, no foul.

Color me bearish. I think we are on the eve of a Royal Shitshow anyway....

only RT zoned lots provide for land assembly. Otherwise, our 3 lots could have created 4 x 33' wide lots. Potential of the
added 33' wide lot was 1.5M. That would have been total added after rezoning. Far far less than an RT land assembly.
My work buddy had a land assembly behind him where 3 x RT lots created 9 multi-family homes that are in excess of 1.2M each.

All three lots knew of the potential for rezoning, none of us wanted to sell. Geyser makes it appear that every land owner is an eager seller if there is additional money to be made. Simplistic thinking. Geyser quite obviously does not have a family

yzfr1 · Thu Jul 20, 2017 12:45 pm

Toronto’s once-hot housing market is continuing to show signs of a slowdown, based on data released early Thursday morning by the Toronto Real Estate Board.

In the last two months alone, home prices in the Greater Toronto Area have dropped 14 percent. Back in April, an average Toronto home cost $920,791 — it is now $793,915, a whopping $126,876 drop in overall prices.

I'm assuming it was the foreign buyers tax.

Lots of interesting things from this, the difference between Vancouvers reaction and Torontos price reaction. Same country, same interest rates.

Leads me to think there is not as much speculation as people had assumed. Also there is more demand then originally anticipated

eyesthebye2 · Thu Jul 20, 2017 6:02 pm

Toronto’s once-hot housing market is continuing to show signs of a slowdown, based on data released early Thursday morning by the Toronto Real Estate Board.

In the last two months alone, home prices in the Greater Toronto Area have dropped 14 percent. Back in April, an average Toronto home cost $920,791 — it is now $793,915, a whopping $126,876 drop in overall prices.

I'm assuming it was the foreign buyers tax.

Lots of interesting things from this, the difference between Vancouvers reaction and Torontos price reaction. Same country, same interest rates.

Leads me to think there is not as much speculation as people had assumed. Also there is more demand then originally anticipated

Same thing here in the first few months after the tax.

Geyser · Thu Jul 20, 2017 6:48 pm

"Your old fixer-upper was prime for a land assembly until the new McMansion went up next door. Now only your place and the corner house next to you are financially viable candidates for assembly. Two lots are not big enough for anything really interesting. Previously your side of the street was prime for tear down and being replaced with social housing similar to the older, "low income development" on the next block, but your new neighbour has just screwed that opportunity."

Need to look at the whole block to qualify that statement Geyser.

If the lot sizes were reduced on the other homes on the block, then ETB and his neighbor are in (or will be in) an "arranged marriage"

If the new build is on a lot size akin to the other homes on the block, then it is no harm, no foul.

Color me bearish. I think we are on the eve of a Royal Shitshow anyway....

only RT zoned lots provide for land assembly. Otherwise, our 3 lots could have created 4 x 33' wide lots. Potential of the
added 33' wide lot was 1.5M. That would have been total added after rezoning. Far far less than an RT land assembly.
My work buddy had a land assembly behind him where 3 x RT lots created 9 multi-family homes that are in excess of 1.2M each.

All three lots knew of the potential for rezoning, none of us wanted to sell. Geyser makes it appear that every land owner is an eager seller if there is additional money to be made. Simplistic thinking. Geyser quite obviously does not have a family

Being child-free does give me a different perspective, as does living in a location where land prices have much more potential for dramatic appreciation. If you and your neighbors were able to get three times current assessed value from a lot assembler you would have to be crazy to say no. Such a deal would enable you to buy a much newer and nicer home within a block or two of your current location and still put a million plus in your retirement account. What's not to like about that?

Of course, that's highly unlikely to happen in your location because, unlike Downtown or the Cambie corridor, there would be too much competition from many other willing sellers for miles around you and besides, new build, multi-family units in that type of neighbourhood and that far out of town would have difficulty fetching the premium needed to support an exorbitant buy out offer. A big social housing project would have been your best bet but that now seems very unlikely.
I'll say it again, the secret is "location, location, location".

Geyser · Thu Jul 20, 2017 7:19 pm

"Your old fixer-upper was prime for a land assembly until the new McMansion went up next door. Now only your place and the corner house next to you are financially viable candidates for assembly. Two lots are not big enough for anything really interesting. Previously your side of the street was prime for tear down and being replaced with social housing similar to the older, "low income development" on the next block, but your new neighbour has just screwed that opportunity."

Need to look at the whole block to qualify that statement Geyser.

If the lot sizes were reduced on the other homes on the block, then ETB and his neighbor are in (or will be in) an "arranged marriage"

If the new build is on a lot size akin to the other homes on the block, then it is no harm, no foul.

Color me bearish. I think we are on the eve of a Royal Shitshow anyway....

Based on the Google satellite image, most of the lots in the entire neighbourhood look the same size as ETB's lot.

It occurs to me that a major land assembly might be difficult because the block is mainly "Vancouver Specials" but there are some much nicer newer homes liberally sprinkled amongst them. I would guess that owners of the newer builds would expect unrealistically higher prices than the owners of the few old 80 year-old tear-downs and the numerous Vancouver specials, but the developer will only see the lot values, hence a community meeting of minds on valuations might be very difficult.

I agree that the long overdue "Royal shitshow" is probably very close and may have already begun. Although it will hurt my balance sheet I'm hoping it will help restore some sanity to the market and help reduce the growing social divide. The current situation is unhealthy for everybody, including local homeowners who would like their children to be able to own their own homes within reasonable driving distance of the neighbourhood they grew up in.

eyesthebye2 · Thu Jul 20, 2017 7:25 pm

Downtown is a cesspool, trust me, I know. I'm down there every day for 10+ years.
You couldn't pay me to live there...noise, traffic, panhandlers...
If you're under 30 or over 70 it can be useful. I'm not.

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