This is a friendly, interactive exchange of information on all Real Estate related subjects. Follow on Twitter: @RETALKS


Moderator: admin

 
User avatar
SethM
Real Estate Talker
Posts: 1014
Joined: Thu May 27, 2010 3:32 pm

Re: Is the boom over?

Sun Feb 11, 2018 12:07 am

eyesthebye2 wrote:
The day of reckoning for condos is nigh.
As soon as the BC govt closes the loophole on presale assignments it will be over.
I'm pretty sure developers will be required to disclose transfers, and each buyer/seller will be required to pay the applicable taxes, every time a unit changes hands.

I don't think so. Vancouver is seeing record students from China who buy a condo presale as soon as they get here. By the time the condo is finished they have their permanent residency, so they don't have to pay any taxes. The Government is fast tracking permanent resident status for students.

https://www.universityaffairs.ca/news/n ... y-reforms/

Permanent residency can be fast tracked as quickly as 6 months:

https://students.ubc.ca/sites/students. ... 202016.pdf
 
eyesthebye2
Real Estate Talker
Posts: 1206
Joined: Sun Jul 27, 2014 6:41 am

Re: Is the boom over?

Sun Feb 11, 2018 5:48 pm

Ideally we see a 50% reduction in values to get rid of the swarms of people that buy housing as an investment, and not a place to live.
Realistically, there might be a brief and shallow pullback before another head first dive into a bull market.
 
VanLord
Real Estate Talker
Posts: 318
Joined: Fri Aug 24, 2007 3:52 pm

Re: Is the boom over?

Mon Feb 12, 2018 8:19 pm

eyesthebye2 wrote:
Ideally we see a 50% reduction in values to get rid of the swarms of people that buy housing as an investment, and not a place to live.
Realistically, there might be a brief and shallow pullback before another head first dive into a bull market.

I would say that is wishful thinking, a 50% reduction would bring more investors, since Cap Rates would increase dramatically and the prospect of large gains would drive a new round of capital into the market.  Also wishful thinking to say real estate shouldn't be used as an investment in a Capitalist society.  If that were true we would have no builders, no commercial real estate, nor any rental properties.
 
 
eyesthebye2
Real Estate Talker
Posts: 1206
Joined: Sun Jul 27, 2014 6:41 am

Re: Is the boom over?

Mon Feb 12, 2018 11:18 pm

VanLord wrote:
eyesthebye2 wrote:
Ideally we see a 50% reduction in values to get rid of the swarms of people that buy housing as an investment, and not a place to live.
Realistically, there might be a brief and shallow pullback before another head first dive into a bull market.

I would say that is wishful thinking, a 50% reduction would bring more investors, since Cap Rates would increase dramatically and the prospect of large gains would drive a new round of capital into the market.  Also wishful thinking to say real estate shouldn't be used as an investment in a Capitalist society.  If that were true we would have no builders, no commercial real estate, nor any rental properties.
 


I said ideally, not realistically.
I know far too many owners who treat our housing stock with $$ in their eyes. One Asian invested owns 80 condos, air B&B sucking up our rental stock, the tax evasion. The outright fucking greed. A home is a place to live, stability for your family.
 
VanLord
Real Estate Talker
Posts: 318
Joined: Fri Aug 24, 2007 3:52 pm

Re: Is the boom over?

Tue Feb 13, 2018 12:00 pm

eyesthebye2 wrote:
VanLord wrote:
eyesthebye2 wrote:
Ideally we see a 50% reduction in values to get rid of the swarms of people that buy housing as an investment, and not a place to live.
Realistically, there might be a brief and shallow pullback before another head first dive into a bull market.

I would say that is wishful thinking, a 50% reduction would bring more investors, since Cap Rates would increase dramatically and the prospect of large gains would drive a new round of capital into the market.  Also wishful thinking to say real estate shouldn't be used as an investment in a Capitalist society.  If that were true we would have no builders, no commercial real estate, nor any rental properties.
 


I said ideally, not realistically.
I know far too many owners who treat our housing stock with $$ in their eyes. One Asian invested owns 80 condos, air B&B sucking up our rental stock, the tax evasion. The outright fucking greed. A home is a place to live, stability for your family.

eyesthebye2 wrote:
greed. A home is a place to live, stability for your family.

Yes you are not incorrect, but an Asian investor who owns 80 condos is not an investor, he's a corporation.  Tax evasion should be stopped, but the Feds need to put some basic rules in place and stop allowing foreign capital to leave the country on assignments, flips, etc.  These deals should be taxed the same as if a Canadian was making the trade.  We as Canadians are required to report the Capital Gain (perhaps some Cdns are also cheating) but the fix could be accomplished quite easily by withholding 30% of the proceeds of any sale, or assignment when a corporation or foreign entity is selling, or maybe everyone.  For sure the government should also stop allowing permanent residents to not report worldwide income and get GST Rebates and social assistance while living in 10 million dollar homes.  We should also stop forcing realtors to be the money laundering police.  They are paid based on sales, but yet are required to police their clients and track money laundering.  This is like putting the so-called fox in charge of the hen house.  As a realtor am I going to raise a potential red flag, or turn a blind eye in order to cash in on my commissions???


I have run a short term accommodation in Whistler for over 10 years, Airbnb is a great facilitator in assisting me with this business.  Whistler is built and zoned for this type of accommodation.  Although Whistler has an extreme shortage of affordable long term accommodations, this is not the fault of the successful vacation rental by owner / operator.  Its the fault of the corporation that owns the ski resort and the municipality for poor planning and greed to maximize profits over long term sustainability of the community.  Metro Vancouver is no different in this regard.  If I want to rent out my basement suite, or even a full condo (that doesn't restrict Airbnb through bylaws) on a short term basis then why should the city stop me?


The planning departments are clueless and have allowed affordable housing to be wiped out in the name of new developments, while also driving out small business through zoning changes that are designed to push for new development as quickly as possible.  Instead of grandfathering existing businesses, they force them into a much higher tax rate, which forces them to close, thus allowing new developments to proceed much faster.  


As well the basement suite is an endangered species as land assemblies proceed at a lightning fast pace, scooping up "single" family homes and turn blocks and blocks into expensive townhomes and condos.  The small basement suites are disappearing rapidly, which allowed so many people an affordable rental space to call home.  Ironically with the current zoning and community plans, the more we try to build our way out of this crisis the worse its going to get for low-end affordable housing.


Thus my point is you can't blame the small guy who happens to buy a second, third...80th property to try and get ahead.  When corporations, developers and other elites are bending our politicians and city planning departments to their will, in order to add another 100 million to their balance sheets.  This is the true greed that needs to be stopped.


Folks like you and I who have worked hard, saved our money and invested in real estate will end up being the ones paying in the end, but its naive to say Real Estate is not an investment and should be considered a home.  Last time I checked no one is guaranteed anything in this world, we are extremely lucky to have been born into a society that allows us to be in the 1% (globally) and afford to buy a home and have stability for our families.
 
jimtan
Real Estate Talker
Topic Author
Posts: 5475
Joined: Tue Jul 31, 2007 10:59 pm

Re: Is the boom over?

Wed Feb 14, 2018 6:26 pm

"A fundamental change is underway in the financial markets, and it will not be pleasant


... The Federal Reserve has put in place two new policies. The first has lowered the annual growth in the money supply (M2 SA) to 4 percent from what was touching 8 percent, 15 months ago, and over 10 percent, six years ago. The second is progressively increasing the cost of funds. The real cost of money, as measured by comparing the Federal Funds rate to the Consumer Price Index, has been negative 93 percent of the time since 2010..."

https://www.cnbc.com/2018/02/08/dick-bo ... rkets.html
 
User avatar
SethM
Real Estate Talker
Posts: 1014
Joined: Thu May 27, 2010 3:32 pm

Re: Is the boom over?

Wed Feb 14, 2018 7:07 pm

jimtan wrote:
"A fundamental change is underway in the financial markets, and it will not be pleasant


... The Federal Reserve has put in place two new policies. The first has lowered the annual growth in the money supply (M2 SA) to 4 percent from what was touching 8 percent, 15 months ago, and over 10 percent, six years ago. The second is progressively increasing the cost of funds. The real cost of money, as measured by comparing the Federal Funds rate to the Consumer Price Index, has been negative 93 percent of the time since 2010..."

https://www.cnbc.com/2018/02/08/dick-bo ... rkets.html

Yikes. A deleveraging would be very, very ugly. Would the Gov go for this knowing the consequences? Trump is in real estate and likes low interest rates.
 
VanLord
Real Estate Talker
Posts: 318
Joined: Fri Aug 24, 2007 3:52 pm

Re: Is the boom over?

Wed Feb 14, 2018 11:07 pm

SethM wrote:
jimtan wrote:
"A fundamental change is underway in the financial markets, and it will not be pleasant


... The Federal Reserve has put in place two new policies. The first has lowered the annual growth in the money supply (M2 SA) to 4 percent from what was touching 8 percent, 15 months ago, and over 10 percent, six years ago. The second is progressively increasing the cost of funds. The real cost of money, as measured by comparing the Federal Funds rate to the Consumer Price Index, has been negative 93 percent of the time since 2010..."

https://www.cnbc.com/2018/02/08/dick-bo ... rkets.html

Yikes. A deleveraging would be very, very ugly. Would the Gov go for this knowing the consequences? Trump is in real estate and likes low interest rates.


Interesting article ... And the next question, what does this mean to Vancouver Real Estate...or even Canadian Real Estate.
 
User avatar
SethM
Real Estate Talker
Posts: 1014
Joined: Thu May 27, 2010 3:32 pm

Re: Is the boom over?

Wed Feb 14, 2018 11:18 pm

VanLord wrote:
SethM wrote:
jimtan wrote:
"A fundamental change is underway in the financial markets, and it will not be pleasant


... The Federal Reserve has put in place two new policies. The first has lowered the annual growth in the money supply (M2 SA) to 4 percent from what was touching 8 percent, 15 months ago, and over 10 percent, six years ago. The second is progressively increasing the cost of funds. The real cost of money, as measured by comparing the Federal Funds rate to the Consumer Price Index, has been negative 93 percent of the time since 2010..."

https://www.cnbc.com/2018/02/08/dick-bo ... rkets.html

Yikes. A deleveraging would be very, very ugly. Would the Gov go for this knowing the consequences? Trump is in real estate and likes low interest rates.


Interesting article ... And the next question, what does this mean to Vancouver Real Estate...or even Canadian Real Estate.

Vancouver real estate should remain bullet proof as long as we remain friendly to foreign capital and are viewed as a playground/resort city by the global rich. But if the government changes tax laws, ownership laws, and cracks down on money laundering, well then that's a whole new ball game.

https://www.forbes.com/sites/pamelaambl ... d125687fb6
 
jimtan
Real Estate Talker
Topic Author
Posts: 5475
Joined: Tue Jul 31, 2007 10:59 pm

Re: Is the boom over?

Tue Mar 06, 2018 6:53 am

Here? Late-comers get burned.

"Toronto Home Sales Remain Depressed as Prices Begin Stabilizing

... sales in Canada’s once-hot housing market fell 35 percent from a year earlier to 5,175 units, according to data released Tuesday by the Toronto Real Estate Board. It was the weakest month of sales for February since 2009.

Benchmark prices, which are weighed to account for differences in home type, rose 3.2 percent from a year earlier, driven largely by apartments and townhouses. Average prices across all housing segments also rose compared to last month, though detached home prices tumbled 17 percent to C$1,000,736 from the price spike seen in February a year ago..."


https://www.bloomberg.com/news/articles/2018-03-06/toronto-home-sales-remain-depressed-as-prices-begin-stabilizing
 
VanBullBear
Real Estate Talker
Posts: 89
Joined: Tue Dec 22, 2015 2:21 pm

Re: Is the boom over?

Wed Mar 07, 2018 11:45 am

jimtan wrote:
Here? Late-comers get burned.

"Toronto Home Sales Remain Depressed as Prices Begin Stabilizing

... sales in Canada’s once-hot housing market fell 35 percent from a year earlier to 5,175 units, according to data released Tuesday by the Toronto Real Estate Board. It was the weakest month of sales for February since 2009.

Benchmark prices, which are weighed to account for differences in home type, rose 3.2 percent from a year earlier, driven largely by apartments and townhouses. Average prices across all housing segments also rose compared to last month, though detached home prices tumbled 17 percent to C$1,000,736 from the price spike seen in February a year ago..."


https://www.bloomberg.com/news/articles/2018-03-06/toronto-home-sales-remain-depressed-as-prices-begin-stabilizing

It's unfortunate how some of these "late-comers" are going to be underwater. They were probably thinking "if we don't buy now we can never get in" and that is enough of a reason to over-extend just to get in. FOMO always kills in runaway markets... The government has done such a poor job in regulating and allowed homes be traded like stocks. The general public gets burned the most.
It's going to take some work to repair the damage, but we are heading the right direction.
 
eyesthebye2
Real Estate Talker
Posts: 1206
Joined: Sun Jul 27, 2014 6:41 am

Re: Is the boom over?

Wed Mar 07, 2018 2:16 pm

VanBullBear wrote:
jimtan wrote:
Here? Late-comers get burned.

"Toronto Home Sales Remain Depressed as Prices Begin Stabilizing

... sales in Canada’s once-hot housing market fell 35 percent from a year earlier to 5,175 units, according to data released Tuesday by the Toronto Real Estate Board. It was the weakest month of sales for February since 2009.

Benchmark prices, which are weighed to account for differences in home type, rose 3.2 percent from a year earlier, driven largely by apartments and townhouses. Average prices across all housing segments also rose compared to last month, though detached home prices tumbled 17 percent to C$1,000,736 from the price spike seen in February a year ago..."


https://www.bloomberg.com/news/articles/2018-03-06/toronto-home-sales-remain-depressed-as-prices-begin-stabilizing

It's unfortunate how some of these "late-comers" are going to be underwater. They were probably thinking "if we don't buy now we can never get in" and that is enough of a reason to over-extend just to get in. FOMO always kills in runaway markets... The government has done such a poor job in regulating and allowed homes be traded like stocks. The general public gets burned the most.
It's going to take some work to repair the damage, but we are heading the right direction.


You're viewing a property from a completely different perspective. Most people buy a home to live in. With the extreme shortage of rental properties it's never been as important to secure your own housing. You're looking at it as an investor.
When I bought my home I thought it was likely I'd lose money in the short run. I didn't care. If I didn't buy and prices went up I'd be shut out.
It worked out pretty good for me in the short and long run.

For those looking at it from an investment angle...you'll always be twisting in the wind trying to figure out when to buy or sell.
Good luck with that
 
rofina
Real Estate Talker
Posts: 1550
Joined: Fri Feb 06, 2009 6:39 pm

Re: Is the boom over?

Wed Mar 07, 2018 2:29 pm

eyesthebye2 wrote:
VanBullBear wrote:
jimtan wrote:
Here? Late-comers get burned.

"Toronto Home Sales Remain Depressed as Prices Begin Stabilizing

... sales in Canada’s once-hot housing market fell 35 percent from a year earlier to 5,175 units, according to data released Tuesday by the Toronto Real Estate Board. It was the weakest month of sales for February since 2009.

Benchmark prices, which are weighed to account for differences in home type, rose 3.2 percent from a year earlier, driven largely by apartments and townhouses. Average prices across all housing segments also rose compared to last month, though detached home prices tumbled 17 percent to C$1,000,736 from the price spike seen in February a year ago..."


https://www.bloomberg.com/news/articles/2018-03-06/toronto-home-sales-remain-depressed-as-prices-begin-stabilizing

It's unfortunate how some of these "late-comers" are going to be underwater. They were probably thinking "if we don't buy now we can never get in" and that is enough of a reason to over-extend just to get in. FOMO always kills in runaway markets... The government has done such a poor job in regulating and allowed homes be traded like stocks. The general public gets burned the most.
It's going to take some work to repair the damage, but we are heading the right direction.


You're viewing a property from a completely different perspective. Most people buy a home to live in. With the extreme shortage of rental properties it's never been as important to secure your own housing. You're looking at it as an investor.
When I bought my home I thought it was likely I'd lose money in the short run. I didn't care. If I didn't buy and prices went up I'd be shut out.
It worked out pretty good for me in the short and long run.

For those looking at it from an investment angle...you'll always be twisting in the wind trying to figure out when to buy or sell.
Good luck with that

I can definitely appreciate that perspective, it makes sense when written.
But in practical terms, its not so simple.
If you purchase property with say 10% down,and the market turns against you, you lose your equity. No big deal, if you plan to be in long term.
However, if the market turns say 15 or 20% and you are underwater 10% that can have real implications on your ability to refinance your property come renewal time. And especially now that lenders have the full legal right to stress test you come renewal time if they feel you have since become a vulnerable owner due to a myriad of possible circumstances.
I will agree that owning is still a good idea on a 10 year time horizon. But now more than ever, I would suggest caution. 
 
VanLord
Real Estate Talker
Posts: 318
Joined: Fri Aug 24, 2007 3:52 pm

Re: Is the boom over?

Wed Mar 07, 2018 3:49 pm

rofina wrote:
eyesthebye2 wrote:
VanBullBear wrote:
It's unfortunate how some of these "late-comers" are going to be underwater. They were probably thinking "if we don't buy now we can never get in" and that is enough of a reason to over-extend just to get in. FOMO always kills in runaway markets... The government has done such a poor job in regulating and allowed homes be traded like stocks. The general public gets burned the most.
It's going to take some work to repair the damage, but we are heading the right direction.


You're viewing a property from a completely different perspective. Most people buy a home to live in. With the extreme shortage of rental properties it's never been as important to secure your own housing. You're looking at it as an investor.
When I bought my home I thought it was likely I'd lose money in the short run. I didn't care. If I didn't buy and prices went up I'd be shut out.
It worked out pretty good for me in the short and long run.

For those looking at it from an investment angle...you'll always be twisting in the wind trying to figure out when to buy or sell.
Good luck with that

I can definitely appreciate that perspective, it makes sense when written.
But in practical terms, its not so simple.
If you purchase property with say 10% down,and the market turns against you, you lose your equity. No big deal, if you plan to be in long term.
However, if the market turns say 15 or 20% and you are underwater 10% that can have real implications on your ability to refinance your property come renewal time. And especially now that lenders have the full legal right to stress test you come renewal time if they feel you have since become a vulnerable owner due to a myriad of possible circumstances.
I will agree that owning is still a good idea on a 10 year time horizon. But now more than ever, I would suggest caution. 

It will be interesting to see if we ever get to that point in Canada.  Will the Banks actually push a paying customer into a forced sale in a Bear market.  They Bank may actually have the most to lose in this case, because there is negative equity and if the homeowner goes into bankruptcy after the bank forces a sale, the bank stands to lose the most.  If the customer stops paying their mortgage payments, the bank has little choice, but if a client is considered vulnerable but makes all mortgage payments, the bank may have little choice but to renew the mortgage.
Again keep in mind in Canada the bank would have to force a sale, they don't actually take possession of the home.  The courts ultimately decide if the bank can force the sale and even after a sale is agreed to, the current owner can successfully stop the sale in court, when the final court proceeding takes place to approve the sale.

As for Eyes comments, the investors are not the ones twisting in the winds, they have a pretty good idea of what the income and expenses will be and if they can't get what they want out of a property in terms of a sale price, they can generally hold on through a downturn.  

Its easy for you to smugly say that homes are not an investment, but you sure like to count the equity you've built up.  Go talk up your achievements on a few of the comments sections of the newspapers and see how much love that gets you from all the lowly rentors, who are apparently dreaming about owning.
 
VanBullBear
Real Estate Talker
Posts: 89
Joined: Tue Dec 22, 2015 2:21 pm

Re: Is the boom over?

Wed Mar 07, 2018 4:02 pm

rofina wrote:
eyesthebye2 wrote:
VanBullBear wrote:
It's unfortunate how some of these "late-comers" are going to be underwater. They were probably thinking "if we don't buy now we can never get in" and that is enough of a reason to over-extend just to get in. FOMO always kills in runaway markets... The government has done such a poor job in regulating and allowed homes be traded like stocks. The general public gets burned the most.
It's going to take some work to repair the damage, but we are heading the right direction.


You're viewing a property from a completely different perspective. Most people buy a home to live in. With the extreme shortage of rental properties it's never been as important to secure your own housing. You're looking at it as an investor.
When I bought my home I thought it was likely I'd lose money in the short run. I didn't care. If I didn't buy and prices went up I'd be shut out.
It worked out pretty good for me in the short and long run.

For those looking at it from an investment angle...you'll always be twisting in the wind trying to figure out when to buy or sell.
Good luck with that

I can definitely appreciate that perspective, it makes sense when written.
But in practical terms, its not so simple.
If you purchase property with say 10% down,and the market turns against you, you lose your equity. No big deal, if you plan to be in long term.
However, if the market turns say 15 or 20% and you are underwater 10% that can have real implications on your ability to refinance your property come renewal time. And especially now that lenders have the full legal right to stress test you come renewal time if they feel you have since become a vulnerable owner due to a myriad of possible circumstances.
I will agree that owning is still a good idea on a 10 year time horizon. But now more than ever, I would suggest caution. 

Thank you for getting it.
When house prices are more in line with median income, for sure think about it as a home and a place to live - not an investment.
However, as house prices increase and you have to allocate more and more of your budget to mortgage, the playing field becomes different - therefore you have to think differently.
If you're spending more than 30% of your income on a mortgage, what are you sacrificing? You can't invest as much and your quality of living deteriorates.
What if you're spending 40%? 50%? is it still just a home and not an investment?
The truth is with these prices you HAVE to think about it as an investment, rather you are forced to, unless you're in the top 0.5% of income earners and have plenty of capital to spare.

Who is online

Users browsing this forum: Yahoo [Bot] and 5 guests