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WhipMaster
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Re: Doom – Vacancy rates drop big

Tue Aug 19, 2014 9:15 pm

Ole! :lol:
Hoo~Cudda~Not~Nod~ed????? :-)
 
rofina
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Re: Doom – Vacancy rates drop big

Wed Aug 20, 2014 2:42 pm

Doom Doom Doom

Extreme shortage of rental units as the school year starts. Global TV News did a feature.
I wonder if this one day will lead to an increase in rental costs in Vancouver? How many years in a row can this city have sub 3% vacancy rates and not see pressure on rents? I don't get that.
 
Geyser
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Re: Doom – Vacancy rates drop big

Wed Aug 20, 2014 4:56 pm

Doom Doom Doom

Extreme shortage of rental units as the school year starts. Global TV News did a feature.
I wonder if this one day will lead to an increase in rental costs in Vancouver? How many years in a row can this city have sub 3% vacancy rates and not see pressure on rents? I don't get that.
Until fairly recently our vacancy rates were below 1% for several years, the world didn't end and rents didn't spike upwards.

Here's some information from a recent Vancouver Sun article, it helps explain why rents on some condos are currently dropping:
City Hall reports 63 new rental buildings are being developed and another 20 are being considered, with city planners encouraging developers to build family-friendly two- and three-bedroom units.

The new rentals may not significantly ease the region’s vacancy rate but are affecting the rental market.

According to The Goodman Report, a newsletter on multi-family investment property, the new supply is leaving some units empty in the newer buildings.

That’s because rents are lower in buildings constructed before 2000, which don’t offer the amenities of the newer buildings, like in-suite laundry facilities. Also, there’s more competition out there from an increased number of condo suites being let.

The new competition is lowering prices for condo suite rentals, says the report, pointing out the usual rent premium over traditional apartment units — 32 per cent — has dropped to 23 per cent.
Here's the link to the entire article:

http://www.vancouversun.com/business/Ba ... z3Ayw5dXYs

And here's are some observations from another article from 5 years ago, it puts today's vacancy rate in perspective. After several years of sub-1% vacancy rates they were celebrating the vacancy rate surging up to 2.1% in apartments and a rosey (for renters) 1.7% in condos.
Rental Rates in Vancouver
The rental apartment vacancy rate in Vancouver increased to 2.1% following several years of vacancies below 1%. The condo rental vacancy rate increased to 1.7%. Renters had an easier time finding rental accommodation in Vancouver during the fall of 2009, compared to the previous year. Higher rental apartment vacancy rates mean renters have more choice. Although higher than the previous year, Vancouver's vacancy rate is still below the national average and among the lowest in the country.
http://www.bcaomarentals.com/rental_rates.php
Even without our rent controls it's hard to see any looming pressure on rents. Realistically, the maximum permitted rent increase (inflation + 2%) might be hard to get.
In fond memory of Taipan, a model of modesty, decency, dignity and tolerance. Long may we all prosper from the tremendous legacy of worldly wisdom and specialized real estate knowledge which he left in the "Arguments" thread.
 
westcoastfella
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Re: Doom – Vacancy rates drop big

Wed Aug 20, 2014 6:10 pm

Doom Doom Doom

Extreme shortage of rental units as the school year starts. Global TV News did a feature.
I wonder if this one day will lead to an increase in rental costs in Vancouver? How many years in a row can this city have sub 3% vacancy rates and not see pressure on rents? I don't get that.
Do vacancy rates take into account all the non-reported or illegal basement suites? Do they take into account any basement suites at all? If not, that would surely make the vacancy rate numbers nearly meaningless...
 
jimtan
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Re: Doom – Vacancy rates drop big

Wed Aug 20, 2014 8:24 pm

Why do I bother? :roll:

The deniers are still squabbling while their bridges BURN! They're so far behind that there's no catching up. :mrgreen:
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WhipMaster
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Re: Doom – Vacancy rates drop big

Wed Aug 20, 2014 8:47 pm

Arriba, arriba! Ándale! :lol:
Hoo~Cudda~Not~Nod~ed????? :-)
 
Geyser
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Re: Doom – Vacancy rates drop big

Wed Aug 20, 2014 11:18 pm

Why do I bother? :roll:

The deniers are still squabbling while their bridges BURN! They're so far behind that there's no catching up. :mrgreen:
I know I don't have any catching up to do as far as you're concerned, but I do stand to lose a chunk of paper profit when the correction comes. Interestingly, the fact that I'm in a relatively fireproof position doesn't blind me to the fact that my portfolio could (and probably will) take a drubbing over the next few years.

I'm not a market timer but I was persuaded to lightened up on condo investment in Vancouver at what now appears to have been the market top, now I just hope I'm well enough diversified that a big realestate bust wont hurt me too much.

As a Vancouver property owner, a lot of my lack of fear is related to being completely debt free and having diverse income streams. How about you? How do 8% to 12% mortgage rates resonate in your mind? Of course, Tokyo has shown us that property bubbles can still burst even when interest rates are 1% or lower.

This might not be a good time to get overly smug about your late-in-life condo purchase still being close to the price you paid for it.
In fond memory of Taipan, a model of modesty, decency, dignity and tolerance. Long may we all prosper from the tremendous legacy of worldly wisdom and specialized real estate knowledge which he left in the "Arguments" thread.
 
Geyser
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Re: Doom – Vacancy rates drop big

Wed Aug 20, 2014 11:45 pm

Doom Doom Doom

Extreme shortage of rental units as the school year starts. Global TV News did a feature.
I wonder if this one day will lead to an increase in rental costs in Vancouver? How many years in a row can this city have sub 3% vacancy rates and not see pressure on rents? I don't get that.
Do vacancy rates take into account all the non-reported or illegal basement suites? Do they take into account any basement suites at all? If not, that would surely make the vacancy rate numbers nearly meaningless...
No, basement suites aren't counted, and the number of them will multiply dramatically when interest rates go up.

Jimmy doesn't have a basement in his condo but ETB probably does and he might not have been forced to rent it yet, if he does rent it he might still have a chance of making the higher payments on his 1/2 million dollar mortgage if he has to renew at higher rates.

God, the stress of just thinking about those potentially devastating mortgage renewal rates must be dreadful. Then there's the worry about whether or not that stranger renting the basement will start a fire, or stop paying the rent, or set up a meth lab, or have a fridge full of human heads. :shock:

There were times earlier in my life when I carried much bigger mortgages than ETB and it was scary, the thought of possibly having to renew at double or triple the original rates probably would have given me stomach ulcers.

I suspect that a lot of the bluster from those who bought in recent years is just an attempt to convince themselves that property prices can never collapse (like they have in the past) and it's all unicorns and rainbows from her on.
In fond memory of Taipan, a model of modesty, decency, dignity and tolerance. Long may we all prosper from the tremendous legacy of worldly wisdom and specialized real estate knowledge which he left in the "Arguments" thread.
 
westcoastfella
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Re: Doom – Vacancy rates drop big

Thu Aug 21, 2014 6:24 am

Why do I bother? :roll:
Thats a good question.

You're the one that posted the original topic, indicating that it was pending doom that the vacancy rate has dropped. However, it is clear that the "vacancy rate" is in fact not THE vacancy rate for all rentals in Vancouver and seems to leave a lot of available rentals out of its calculation, so perhaps THE vacancy rate it is not dropping at all. rofina also points out despite hovering near zero rental rates for several years, rents have not really gone up in the city, leading to the obvious question, "why not?", and "where is the impending doom?"

Yet instead of engaging in debate - which is normally what one wants when they post something like your post - you roll your eyes and move on with your own agenda, whatever that is. Which really reinforces your own rhetorical question Jim - if you don't want a debate and don't want counter arguments, why DO you bother posting at all?
 
jimtan
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Re: Doom – Vacancy rates drop big

Thu Aug 21, 2014 6:37 am

Why do I bother? :roll:
Thats a good question.

You're the one that posted the original topic, indicating that it was pending doom that the vacancy rate has dropped. However, it is clear that the "vacancy rate" is in fact not THE vacancy rate for all rentals in Vancouver and seems to leave a lot of available rentals out of its calculation, so perhaps THE vacancy rate it is not dropping at all. rofina also points out despite hovering near zero rental rates for several years, rents have not really gone up in the city, leading to the obvious question, "why not?", and "where is the impending doom?"

Yet instead of engaging in debate - which is normally what one wants when they post something like your post - you roll your eyes and move on with your own agenda, whatever that is. Which really reinforces your own rhetorical question Jim - if you don't want a debate and don't want counter arguments, why DO you bother posting at all?
You know. There are people who need only the minimal amount of information to grasp a market. Then, there are the others who over-analyse because they are procrastinators. Then, there are the few who are in denial. They're go to any lengths to cherry pick. To grasp at straws.

Unfortunately, markets wait for no man. :shock:
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westcoastfella
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Re: Doom – Vacancy rates drop big

Thu Aug 21, 2014 7:22 am


You know. There are people who need only the minimal amount of information to grasp a market. Then, there are the others who over-analyse because they are procrastinators. Then, there are the few who are in denial. They're go to any lengths to cherry pick. To grasp at straws.

Unfortunately, markets wait for no man. :shock:
So what is your premise here Jim? You've indicated that vacancy rates have "dropped big" to around 1%, because CMHC tells you so, and that this spells "doom". So your logical conclusion must be that rental rates will go up due to lack of supply, or that people will have a hard time finding anywhere to live because of lack of supply. You even posted a follow up link to a group of UBC students that are having a hard time finding an apartment in August near the university to reinforce the latter point.

However:

- rofina has indicated that rents have not actually gone up all that much over the last decade, despite continued "official" near-zero vacancy. How odd - you would think that with so little supply rents would have gone through the roof by now (pun intended). How is this oddity explained?
- your own link to the CMHC site confirms that "rental" == "privately-initiated structures with at least three rental units", which would seem to ignore the vast numbers of rental stock that does not fit into CMHC's definition, and is therefore not accounted for in the vacancy rate numbers. Do you think that this might throw the official vacancy rate numbers into question?
- other than UBC students having a hard time finding an apartment in the week before school starts (duh, it happens every fall in every university town in Canada), there are no articles about people having a hard time finding a rental apartment in the LM. They may not find it downtown, or out by UBC in August, but they find something - because there is in fact, rental stock to be rented. But can you point us to any other sources that indicate people are having a hard time finding anywhere to live?

Soooo, just to finish spelling this out for you - your argument has been countered. Do you have any thoughts on the above points, other than eye rolls and not-so-veiled insults?
 
jimtan
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Re: Doom – Vacancy rates drop big

Thu Aug 21, 2014 7:47 am

All it means is that you have the wrong model. Years ago, we're already covered the subject of rent control and the effect on supply. Yet, you guys keep beating the same drum.

You can debate till the cows come home. But, the market says you're wrong. :mrgreen:

Fact is that population continues to grow. City Council is desperately looking for ways to increase supply. Developers are building to price points. Money flows in from Asia. Mortgage rates are low. Buyers are willing to pay the price.

Rents are low. So, supply refuses to catch up till house prices rise. Then, vacancies rise again because of the excess of supply.

We've seen it all before. Rents rise too slowly because of rent control. Vacancies fall to ridiculous levels. Rentals aren't available even you are willing to pay more. So, people are forced to buy.

Bottom line is that prices have to rise in order to create vacancies. That's Economics 101. Pity that you and rofina took philosophy in school. :mrgreen:
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jimtan
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Re: Doom – Vacancy rates drop big

Thu Aug 21, 2014 8:40 am

You guys think that you're so smart. Why buy when rent is so cheap!!!!! :mrgreen:

You'll end up like the senior citizens in the west end grimly hanging on to their apartment for 30 years. Paying only a fraction of market rent for grimy crumbling flats.

You'll be forced to move away once you're forced out of your 'cheap' digs. Meanwhile, people like ETB are smiling all the way to the bank.

Here's the irony. While you desperately defend rent control, home prices are rising more than they would if there were an efficient rental market. :shock:
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WhipMaster
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Re: Doom – Vacancy rates drop big

Thu Aug 21, 2014 9:01 am

Doink! Doink! Doink! :mrgreen:
Hoo~Cudda~Not~Nod~ed????? :-)
 
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Warren12
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Re: Doom – Vacancy rates drop big

Thu Aug 21, 2014 2:12 pm

Rents have gone up in my area (Yaletown). It's not pleasant trying to upgrade from our 1bd + den to a 2bd.

We started renting here in 2010, our lovely landlord has not increased the rent at all. When I look around, we are paying below the current market for our place, by about $200 easy.
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