Vancouver's Real Estate Market

[Mr.HappySilp]

Originally Posted by GLOW

I remember the insulation in the mechanical duct was all wrong in the village and made front Page News. Don't know if and how it was resolved.

Also not sure how the chunk of housing there used for social housing affects things either. But I remember seeing units of the village advertising in the paper hory shit its expensive lol. Rather try to get in to the social housing portion

Exactly, I am going to be honest, if I am paying close to 1m for an apartment I want people around that area to be around the same status as me in terms of wealth, social culture.....

Why would I want to throw 1m and have a have some people that's on wealfare living next to me(not saying they are bad people).

What the gov did there was just a mess.

Just look around Metrowtown and Brentwood mall, tons of apartment building around them..... is crazy.

[Presto]

Originally Posted by SumAznGuy

Having been to S. Florida for vacy and knowing people there, it's not as nice as people make it out to be. The crime/murder rate is pretty high there. Step into the wrong neighbourhood and it is almost as bad as Compton.

Driving along the highway, you will see a lot of boarded up buildings and run down crack shacks a few minutes from the beach. Remember the hotel scene in Slum Dog Millionaire? There is a big hotel that went under and is all boarded up right on the beach.

Oh yeah, and when it is huricanne season, you don't want to be living in S. Florida.

But like what Tapioca said. Short term work or vacay doesn't give you the full spectrum of what living in that place is like.

I always enjoy my visits to Hong Kong, but I don't think I would enjoy living/working there in the summer when it is hot and humid or when the typhoons hit.

There's a reason why this .GIF gets used when people talk about Florida!

[MoBettah]

Originally Posted by Presto

There's a reason why this .GIF gets used when people talk about Florida!

Someone needs to make a Quebec version of that.

[mikemhg]

Originally Posted by twdm

For his clients or for him?

It's like asking a hooker when's the best time to get a blowjob.

That's absolutely retarded. So if I bought a house a day before the crash in 2009, even if not for an invenstment, that would've been a good day? LOL

[EvoFire]

Originally Posted by MoBettah

Someone needs to make a Quebec version of that.

If only Quebec can float away like that. They are a bit landlocked with only the bay on top.

[Gridlock]

Originally Posted by SumAznGuy

Having been to S. Florida for vacy and knowing people there, it's not as nice as people make it out to be. The crime/murder rate is pretty high there. Step into the wrong neighbourhood and it is almost as bad as Compton.

Driving along the highway, you will see a lot of boarded up buildings and run down crack shacks a few minutes from the beach. Remember the hotel scene in Slum Dog Millionaire? There is a big hotel that went under and is all boarded up right on the beach.

Oh yeah, and when it is huricanne season, you don't want to be living in S. Florida.

But like what Tapioca said. Short term work or vacay doesn't give you the full spectrum of what living in that place is like.

I always enjoy my visits to Hong Kong, but I don't think I would enjoy living/working there in the summer when it is hot and humid or when the typhoons hit.

I was always the same way, I thought, like so many other people, "how can Florida NOT be awesome...sunny, its got Disney, Key West...Miami" Then my father moved there, after wanting to go for years and its like "you made a lot of bad decisions and burned A LOT of family bridges to get here, and you live in a semi ghetto. Congrats dude!"

[SumAznGuy]

Originally Posted by Gridlock

I was always the same way, I thought, like so many other people, "how can Florida NOT be awesome...sunny, its got Disney, Key West...Miami" Then my father moved there, after wanting to go for years and its like "you made a lot of bad decisions and burned A LOT of family bridges to get here, and you live in a semi ghetto. Congrats dude!"

One of my friends is from Miami. He grew up in Miami and lived in Baltimore before coming to Vancouver. I always asked him why? I loved Miami when on vacay. Keys, loved it too. Ft. Lauderdale, loved it especially during spring break.

Then the second time around, the wife and I rented a car and drove around quite a bit and then saw how run down the area was.
We recognized alot of Miami from shows like Hogan knows best and other Miami based shows. They did a lot to hide the crappy areas and only showed the nicer parts of town. Sorta like The real House wives of Vancouver. They went to the Bourdon Country Bar but didn't show a block away was the DTES skid row.

[jameswift]

Vancouver and Real Estate.

We are a city proud of our Real Estate and dare someone say we will see a price drop, there is hell to pay.

There is a good reason for this. Many people are banking on rapidly increasing home prices to sustain increased net worth. Realtors, mortgage brokers, contractors, builders, and the list goes on. There is a lot to gain by too many people to even listen to such words.

After all, real estate only goes up right?

The billion dollar question cannot really be answered since nobody has a crystal ball. Prices may drop, they may stay the same, or they may increase.

All the education in the world cannot predict the future. However, what we can do, is look at the truth of today and try and form an opinion.

Fact #1 - House prices versus incomes are dangerously high.

Average home prices, even for starter homes are far too expensive compared with wages offered in this city. Consider that living in a typical 'average' home to raise a family is going to run $800k in a city such as East Van. Run the number and see how much income is required and how much of a down payment is required.

Fact #2 - Interest rates are at an all time low

While we have seen the overnight rate fall below current levels, as a general rule, most of the population obtains 5 year fixed rate mortgages. This 'leveling' off means that it has been a very long time since mortgage rates have been at their more 'typical' historical rates. Consider that if interest rates did increase a few points, for some, their payments would double. If someone is paying $2000 a month for a mortgage and now has to pay $4000 for renewal, it's going to be difficult. That said, interest rates in places such as Japan have been in very low status for many years however real estate prices typically deflated slowly as time went on.

Fact #3 - Global Market Changes

Lets be honest. Bob Smith is not buying most of the homes. Mr. Lee or Mr. Chan are buying homes. It makes sense. We are Global, and shifts in Asia have pushed the upper middle class into the million dollar club. Vancouver is a city very much designed and accommodating to Asia. This would also support the above comments that local incomes do not support house prices. Money is made elsewhere and is spent in Vancouver.

Fact #4 - Prices and rents tell the story of value

When you buy a stock, you look at the P/E Ratio and if it doesn't look good, you have to be careful how you make the play. Vancouver Real Estate is often much the same. This also tells the story of affordability.

I won't get into the number crunching but from an investing point of view, Vancouver is a poor choice. Buying a condo and renting it out is worse then buying a GIC even with today's current rates if you just look at it from a cashflow point of view.

The reason people are excited about home ownership is because there is the expectation of capital appreciation on the property. Provided prices keep soaring upwards, then the yields can be poor and buyers are still happy.


Lots more to add but who really knows what's going to happen. I personally own a place that I rent out and I rent another place that I live in. The reason is my purchase price of my condo means with renters, I break even after strata, taxes and mortgage.

My rent is a bit more expensive but then I live in a place that's at least twice as nice as my personal home for $300 more a month. To me, it's worth it. The current owner of where I am renting is taking an $900 loss per month.

A friend is renting a $3 million dollar house in Richmond for $3500 a month. The home owner is not too bright.

Prices will likely fall IF overseas money stops or we see increased interest rates. Who knows.

[hk20000]

^ As you have mentioned the amount of rent you can gather from the price you have to pay to buy in is ridiculous in some areas of town, such as your own example a 3mil home rented for 3500 a month...

but then some people are in it to "park" their money because if the money is still in China / 3rd world country / wherever not so safe the money is likely to just vanish anyway.

so 50% of something is better than 100% of nothing applies in some market transactions. Where the price is ridiculously high and one would just buy wherever the new owner can park his new found wealth even if he is prosecuted / murdered overseas his heirs could retain the majority of the wealth.

On the flip side, if you are buying into apartments in downtown it still isn't a bad proposition for rent-out in its rent / cost to buy ratio. A dumpy little apartment in DT that went for 350k or thereabouts could rent for $1500 + parking lease if you choose it right. So you are in for some ROI if you put 30% down initially.

[Hondaracer]

So is renting a feasible reality for someone who could afford to buy? Renting above your buying power?
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[Gridlock]

Originally Posted by Hondaracer

So is renting a feasible reality for someone who could afford to buy? Renting above your buying power?
Posted via RS Mobile

Yes and no. Here's a rule of thumb to consider...don't rent more than you can buy.

That works with cars and houses.

If you are forgoing the purchase of a modest condo that's within your budget so you can instead go and rent a pimpin' pad in Yaletown to show off to your friends-you are probably doing it wrong. Not saying its going to be the end of you, but your priorities probably aren't in order.

Same thing with leasing a car. If you are forgoing the purchase of a car, so you can instead lease a more expensive vehicle-once again, have at it if you want that, but your priorities probably aren't in order.

I think in a market where the prices are high, and the uncertainty is high, now would not be the time to buy...its time to rent and wait it out. Whatever you believe on the "will prices drop, and how far will they" issue, I think we can ALL agree on one thing: They aren't shooting up anytime soon. So, playing out a waiting game isn't a bad idea.

And let's also remember one other rule: Prices rise and fall because WE make it so, collectively. If everyone chose to lose faith in real estate, the prices will fall. There are outside forces that affect people's decisions, in the aggregate, but at the end of the day, a dollar has a value because everyone chooses to give it one. Otherwise, its a pretty piece of paper with a picture on it.

[4444]

Originally Posted by asian_XL

I'll sit here and see how an economic degree can predict the NA real estate market.

btw, I also thought the same a couple years ago when sold my home waiting for the RE market to plunge to make big buck, but it was a reality check.

you really have a hard on about economics degrees

no one EVER said they could predict housing markets, ESPECIALLY not north american (although i did make a call about certain US cities that I own in, and have significant cash flows and unrealized gains in those properties - my calls have been pretty close - we'll see if that continues).

and for you selling your house... well, NO ONE can ever time anything, EVER, and really, sounds like you were the one trying to predict a housing crash and got burned, maybe that's why you're so bitter.

also, a couple of years ago, there was nothing to start the fall - while things were overpriced then, there usually needs to be a catalyst for a slow down, right now, it's clearly the changes to mortgage rules that has brought this change, and boy are we going on a fun plunge down over the coming years... but all its doing it reverting back to mean (it will overshoot slightly, that's when the smart money will buy - and you don't need to time it perfectly as real estate moves from down to up quite slowly)

there's nothing magical about what i'm saying, nor am i predicting anything outrageous, just following sound economic evidence

[LiquidTurbo]

Originally Posted by jameswift

Vancouver and Real Estate.

We are a city proud of our Real Estate and dare someone say we will see a price drop, there is hell to pay.

There is a good reason for this. Many people are banking on rapidly increasing home prices to sustain increased net worth. Realtors, mortgage brokers, contractors, builders, and the list goes on. There is a lot to gain by too many people to even listen to such words.

After all, real estate only goes up right?

The billion dollar question cannot really be answered since nobody has a crystal ball. Prices may drop, they may stay the same, or they may increase.

All the education in the world cannot predict the future. However, what we can do, is look at the truth of today and try and form an opinion.

Fact #1 - House prices versus incomes are dangerously high.

Average home prices, even for starter homes are far too expensive compared with wages offered in this city. Consider that living in a typical 'average' home to raise a family is going to run $800k in a city such as East Van. Run the number and see how much income is required and how much of a down payment is required.

Fact #2 - Interest rates are at an all time low

While we have seen the overnight rate fall below current levels, as a general rule, most of the population obtains 5 year fixed rate mortgages. This 'leveling' off means that it has been a very long time since mortgage rates have been at their more 'typical' historical rates. Consider that if interest rates did increase a few points, for some, their payments would double. If someone is paying $2000 a month for a mortgage and now has to pay $4000 for renewal, it's going to be difficult. That said, interest rates in places such as Japan have been in very low status for many years however real estate prices typically deflated slowly as time went on.

Fact #3 - Global Market Changes

Lets be honest. Bob Smith is not buying most of the homes. Mr. Lee or Mr. Chan are buying homes. It makes sense. We are Global, and shifts in Asia have pushed the upper middle class into the million dollar club. Vancouver is a city very much designed and accommodating to Asia. This would also support the above comments that local incomes do not support house prices. Money is made elsewhere and is spent in Vancouver.

Fact #4 - Prices and rents tell the story of value

When you buy a stock, you look at the P/E Ratio and if it doesn't look good, you have to be careful how you make the play. Vancouver Real Estate is often much the same. This also tells the story of affordability.

I won't get into the number crunching but from an investing point of view, Vancouver is a poor choice. Buying a condo and renting it out is worse then buying a GIC even with today's current rates if you just look at it from a cashflow point of view.

The reason people are excited about home ownership is because there is the expectation of capital appreciation on the property. Provided prices keep soaring upwards, then the yields can be poor and buyers are still happy.


Lots more to add but who really knows what's going to happen. I personally own a place that I rent out and I rent another place that I live in. The reason is my purchase price of my condo means with renters, I break even after strata, taxes and mortgage.

My rent is a bit more expensive but then I live in a place that's at least twice as nice as my personal home for $300 more a month. To me, it's worth it. The current owner of where I am renting is taking an $900 loss per month.

A friend is renting a $3 million dollar house in Richmond for $3500 a month. The home owner is not too bright.

Prices will likely fall IF overseas money stops or we see increased interest rates. Who knows.

Could you write more about this matter please? You have a nice way with words and seem knowledgable about the subject.

I would like your thoughts on, getting a super cheap apartment in a place like Surrey/ Langley, or buying a home in these areas and renting out part of it.

[LiquidTurbo]

Originally Posted by lowside67

I have been shopping very seriously in the area and have spent some time looking at every display available in the area. IMO one of the biggest problems is that a lot of the new units are on either W2nd or Quebec St. ie big ass traffic. Also, a lot of the builders in the area are not being 100% straightforward about other proposed developments, the SEFC community plan is located here:
https://vancouver.ca/docs/sefc/offic...pment-plan.pdf

Currently there are approximately 2000 units that are being developed and there are about another 1500 units that havent even been announced - ie the big parking lot directly to the east of the existing olympic village is actually owned by Concert and slated to be 3 towers 12, 13, 14 floors respectively but nobody who sells at Lido or Central across the street seem to be acknowledging that all their units will stare directly at 2 years of construction and then into new units.

The biggest problem is all the units will be like interior yaletown - facing one another directly, which I personally really don't like.

With that said, the prices are reasonable - ground floor walkups are what I have been looking at and prices are around $620-$630sqft which is definitely a good 20% cheaper than equivalent downtown.

Hope that helps, if you have questions about specific developments, shoot. FWIW if I was buying pre-sale I have narrowed it to Lido (Bosa) or Meccanica (Cressey).

Mark

So what do you foresee the situation to be like in 2014.. prices come down?

[lowside67]

I wish I had a crystal ball... there are so many relevant factors at play.

On the one hand, there are so many units going up that it seems hard to believe that there is the demand to absorb them all. Yet on the other hand, sales for most developments have been brisk, and some such as Wall Centre and a few of the Pinnacle buildings have 100% sold out. At this point there definitely is some stagnating, most of the buildings such as Opsal, Meccanica, etc are around 50% sold after some time on the market. Opsal, for example, is the only high rise in the area, but it has been for sale for 3 YEARS! They actually shut down the sales center and re-opened after re-branding the project... to give you an idea of what a fail it was.

On the flip side, prices for new construction in the area have appreciated about 15% over 2010 levels... there are about 2 dozen assignments for sale at the Wall Center which is underway now and will be complete in early 2013, about a year ahead of most of the other projects. Many of these assignments are as much as 20% over the price of the original sale and are still competitive with the market. If you were there early in the presale for Wall, you could have bought a 16th floor penthouse unit 950sqft 2BR with a huge wrap-around terrace for around $600k - they sold several of them. Now, that same unit is $729k. On the flip side, you'd still have to pay north of $800k in the actual Olympic Village and few other buildings in the SEFC area will be as well well located as Wall is.

Personally, I've decided that speculating 2 years out is more risk than I am willing to accept at this point. I am looking at assignments as they come up in Wall as the time frame is much shorter - the interest rates are a real factor in this decision too. I can qualify for 2.9% fixed on 5 years and they will honour this rate for 6 months from my approval date, but if I want an 18 month spot on a 5-year fixed rate, it's at 4.5%! This, combined with the taxes to be paid, make it a much less attractive bet for me.

Mark

[Jason00S2000]

Originally Posted by Gridlock

Yes and no. Here's a rule of thumb to consider...don't rent more than you can buy.

That works with cars and houses.

If you are forgoing the purchase of a modest condo that's within your budget so you can instead go and rent a pimpin' pad in Yaletown to show off to your friends-you are probably doing it wrong. Not saying its going to be the end of you, but your priorities probably aren't in order.

I disagree.

I rent and I don't own, but I have a ton of fun and the social status and circles afforded when you live downtown is FAR GREATER than what I could achieve by buying what I could afford.

I've blown a ton of money of frivolous cars, renting, and vacations, but I have very few moments of boredom and it has provided me with a personality that gets me in almost anywhere. The women I date are typically spectacular as well.

If your priorities are to save money and date regular women and work a 9-5 job, yes, live in Surrey and purchase.

If your priorities are to enjoy the best that urban life has to offer, and you're willing to risk security of savings to work a little harder than the rest to get more out of life, throw caution to the wind and live it up in the moment.

[diesel_test]

Originally Posted by Jason00S2000

I disagree.

I rent and I don't own, but I have a ton of fun and the social status and circles afforded when you live downtown is FAR GREATER than what I could achieve by buying what I could afford.

I've blown a ton of money of frivolous cars, renting, and vacations, but I have very few moments of boredom and it has provided me with a personality that gets me in almost anywhere. The women I date are typically spectacular as well.

hahahuaa and that's why you're not rich

[Presto]

Originally Posted by diesel_test

hahahuaa and that's why you're not rich

At least he got something with his money, instead of throwing it in the shredder, aka gambling it away.

[diesel_test]

Originally Posted by Presto

At least he got something with his money, instead of throwing it in the shredder, like gambling it away.

my parents still make 500k per year and im probably getting alot more in a few years

[Hondaracer]

Holy fuck you're a tool.
Posted via RS Mobile

[diesel_test]

Originally Posted by Hondaracer

Holy fuck you're a tool.
Posted via RS Mobile

hey atleast im not faking it. so what if you take a chance and lose 100k or so you learn and never go again. there's plenty of $$$ to be made in the future

[too_slow]

^Here's an idea, go f*cking kill yourself.

[diesel_test]

Originally Posted by too_slow

^Here's an idea, go f*cking kill yourself.

hey, who's the tool who posted he rents way beyond what he could afford and says he's goes on big vacations rent exotics. im just saying its a dumb move financially and that's why he's not getting ahead and you guys are attacking me

[westopher]

And you are giving financial and real estate advice when your parents pay your rent, and wage. Grow up a bit, spend your own money, then come back after you learn a little bit about that.

[JaPoola]

Originally Posted by diesel_test

hey, who's the tool who posted he rents way beyond what he could afford and says he's goes on big vacations rent exotics. im just saying its a dumb move financially and that's why he's not getting ahead and you guys are attacking me

At least he's thoroughly enjoying his life you dumb fuck.