Vancouver's Real Estate Market

[DA9ve]

3

Originally Posted by westopher

I’m not disagreeing with most of what you said, but the upgrade part is the worst of it.
Ok so he sells his 400k purchase for 700k and has 300k in the bank. Now he has a 300k down payment to upgrade to a 1m place that would have been 600k when he bought his 400k place effectively costing him 150k more than if he were to have purchased that originally. My numbers are an approximation based on a 50k original down payment but you get the idea. It’s a negative proposition for those upgrading. The big winners are those who are downgrading.
As I said, in most instances those who were first time home buyers that got into the entry level market, the increase in value is a negative other than using it as leverage to invest elsewhere.
As usual, the younger generation that wants to live in a city with job prospects to actually afford this, gets fucked by the increases while the older generation profits. There has to be a breaking point as the generation behind us has no chance.

your example above is really close to what i did myself actually. i'm not disagreeing with you but i'd like to point out reasons why someone would sell an entry level home (purchased 2012) and purchase a larger house (2018). in my case, i needed the space for a family and my priority was to upgrade to a vancouver detach property with standard lot size for flexibility (consistent density policies to maximize value of the land: laneway, duplex, ??) and mortgage helper downstairs. in your exact example, i did actually end up selling for close to those numbers you listed but have cut my current mortgage by 1/3 just by having a mortgage helper downstairs. warranted i am paying more than before but that is relative to the size of home and space i have now so cant compare there. but i agree with you, if i didnt need to upgrade, i would not upgrade to a better/larger property but rather use the equity to invest in something else.

as for your last point on younger generation not being to catch up, i really cant comment as it seems to be a debate relative to what year we are in. i can only comment to my own experience but ill save that for another post

[Hehe]

Originally Posted by westopher

I’m not disagreeing with most of what you said, but the upgrade part is the worst of it.
Ok so he sells his 400k purchase for 700k and has 300k in the bank. Now he has a 300k down payment to upgrade to a 1m place that would have been 600k when he bought his 400k place effectively costing him 150k more than if he were to have purchased that originally. My numbers are an approximation based on a 50k original down payment but you get the idea. It’s a negative proposition for those upgrading. The big winners are those who are downgrading.
As I said, in most instances those who were first time home buyers that got into the entry level market, the increase in value is a negative other than using it as leverage to invest elsewhere.
As usual, the younger generation that wants to live in a city with job prospects to actually afford this, gets fucked by the increases while the older generation profits. There has to be a breaking point as the generation behind us has no chance.

This is a guy who gets it.

Having gotten a small(er) space for cheap back then doesn't mean you can do better now. Say back then a house was double the price of an apartment (300k vs. 600k), today, it would still be roughly double. Say the condo is now 600k, a house is 1.2M.

Sure now you have 300K additional equity, assuming everything being equal, still only have the 60k one originally put down for a 300k unit, so 360k in downpayment, so, 30% DP for a 1.2M house... yes... better... but let's not forget the loan to service now is for a 840k instead of 240k back then.

Unless one's income increased exponentially higher, the added equity still wouldn't afford a person from a condo to a house.

The only way to truly "benefit" from the RE market is if you pull out a particular market completely. By simply "upgrading" in the same market... any potential gain would be wiped.

[JDMDreams]

Don't forget the killer stress test now a days + higher property tax, strata fees that will bring down the mortgage qualifying amount

[TouringTeg]

I am one of the few who bought a condo 40 yr mortgage and zero down. 1 bed + den and one bath near Mayfair Mall in Victoria. Unfortunately my ex gf and I split about 3 years after purchase. I essentially signed over the condo to her with little to no equity. She barely qualified for the mortgage on her own after putting a large amount of cash down to lower the principle.

I bought a 5 bed 3 bath West Hills Langford house in 2012 after selling my 2 bed 2 bath condo I purchased on my own. It became an investment when I bought another older house in Saanich to live in. This was about 2015 before prices started rocketing and Vancouver buyers came over for our cheaper real estate. It had cash flow potential with a seperate 700 sq ft work shop, attached tandem garage and plenty of basement space. The steady rent from the shop has helped us a lot.

I sold the 2012 house in 2019 and net about 200k. Of course this old house works for us but prices in Victoria have gone up so fast that upgrading would mean a large mortgage. We will likely stay put and do upgrades instead of moving to a more expensive house in a nicer neighborhood.

If we stay on track we can be mortgage free in June 2023 at age 43 owning an older detached house in Saanich.

[Jmac]

After 16 years of renting, bought my first house and moved in today

[underscore]

Originally Posted by westopher

Ok so he sells his 400k purchase for 700k and has 300k in the bank. Now he has a 300k down payment to upgrade to a 1m place that would have been 600k when he bought his 400k place effectively costing him 150k more than if he were to have purchased that originally.

While I agree that upgrading when the market is going up isn't ideal that's only really valid for someone that could afford the more expensive place the first time around but chose to buy a smaller place instead. I can't say I've ever met anyone who made that choice. If someone did do that though that means they had the extra money free to invest with. I don't know enough about that to say whether or not they could make $150k with the mortgage difference in the same amount of time but it's still a factor.

[punkwax]

Originally Posted by Jmac

After 16 years of renting, bought my first house and moved in today

Congrats Jmac.

Knowing how thorough you are with stats I’d imagine this was quite the process for you. Based on your due diligence I’m sure you’re happy with the investment.

Congrats again.

[JDMStyo]

Originally Posted by GGnoRE

Just because things turned out this way, it doesn't mean that 4444's risk management was wrong. Equity markets roughly doubled since 2014 (SP500 in CAD return) so as long as you were invested in something, you probably wouldn't be in terrible spot right now either. Granted, buying a home gives retail investors tremendous amount of financial leverage that you otherwise wouldn't have access too. And if i remember correctly, 4444 had a lot of real estate exposure himself too; he just didn't agree with people overstretching themselves to become a homeowner or to buy multiple investment properties.

This is a tried and trued argument - that if you rented and socked away the extra $500-1000 (1/2BR) you would have 'saved" over home owners into a SPY and low MER fee type passive investment vehicle, you would've come close.

2 things
1/ discipline - most people are not that disciplined unless you had a great investment advisor/planner who had DRIP (direct investing) setup that took away $200-500/each paycheque so you couldn't even spend it. Out of sight - out of mind?

2/ leverage. Don't forget this part of any real estate transaction that isn't 100% cash. For investors like ourselves in most condo or presale deal - you are getting 4-5X leverage as all we are putting in is 15-20% of the total amount.

$300K going up 10% was $30K, or half your capital back (if you sold).
20% down on a $300K place was $60K.
The ETF/passive investor would only get 10% of $60K or about $6,000 unless they leveraged 5X and faced margin calls. Quite unlikely, let's be realistic.

Low rates everyday, everywhere Since GFC - worldwide rates has only continued to drop continually. From when I worked in the bank when prime was 6-7% and 5 year fixed rates were routinely 5.8% after discretionary discounts, the private lending and major 5 banks these days now average 2.5-3%. This only supercharged asset appreciation which includes stocks, assets, and of course real estate.

No doubt in next 3-5 years I have no doubt the market will continue to slow down but once again this real estate boom has created haves/have-nots even amongst our generation. Those 25-35 years old who had parents help on a down (or whatever boost) is now $100-200K wealthier than their renting counterparts. Keep in mind in most cities, real estate developers move the markets and have lobbyists in their favors, so it's quite unlikely things will change in the long run.

[westopher]

Originally Posted by underscore

While I agree that upgrading when the market is going up isn't ideal that's only really valid for someone that could afford the more expensive place the first time around but chose to buy a smaller place instead. I can't say I've ever met anyone who made that choice. If someone did do that though that means they had the extra money free to invest with. I don't know enough about that to say whether or not they could make $150k with the mortgage difference in the same amount of time but it's still a factor.

I'll add one more clarification that your statement points out I wasn't clear on.
I'm not saying that the choice he made wasn't the right one for his well being, financial and lifestyle.
I'm saying the market going upward isn't beneficial.
He made the best decision he could have by purchasing a place at a lower price and entering the market, but the variables that are out of his control (the market value) are not a positive for him if he intends to stay in the market.

[JDMStyo]

Happy holidays everyone! Been awhile since posted - been picking up great deals out there and certainly seeing some drastic price reductions for luxury type scenarios. Market has really recovered last 2-3 months and there's even multiple offers for reasonably priced listings.

Here are some Presales follow up 2-4 years later. Tidbits and anecdotes from deals I've come across and/or transacted.
1/ Vittorio metrotown - these have not done well. In 2017 you were a rockstar in summer if Polygon called you for these 2BR $1000/ft deals which started high $700's for 850ft around Maywood area. These are completing in 1.5years and I'm seeing below price assignments for people trying to get their money/liquidity out. LOSS
2/ Imperial metrotown - 2016 sold, 2019 completion. Listings are averaging $950-1000/ft so well up from the $800-850/ft from when it was launched in 2016. 15-25% profit. PROFIT.
3/ King George Hub Surrey - $259-299K 1BR sold out in a month back in 2017 winter 2 years ago. Assignents are happening aroud the $350-399K range, not huge profits but still in the money. PROFIT
4/ Cambie corridor Contessa - didn't do one here but in 2017 Magnum was selling out like hotcakes. I'm seeing cashloss deals here as price averaged $1200/ft along QE Park. $1.2M 2BR around 900ft people asking $950K to get out. LOSS.
5/ Onni's Belpark luxury Cambie Corridor build This is one of the best/worst deals for originally seller I've seen recently. $300K down on $1.4M place that's 1190ft 3BR. Walking away from the $300K deposit. There was about a 10% gain you can get on a near 1200+ ft place 3BR for $1.1M but it's still skinny with fees. LOSS for the original buyer.

New Presales few I've watching.
1. SOCO by Anthem Hot new presales from Anthem. They are hoping something like Station Square which is now the most successful multi-phase tower development in Canada. Right place, right time in 2013 when per ft was $500/ft. However with Coquitlam/Lougheed right now at $1,000.

2. Highline Metrotown by Thind I'm guestimating next Jan/Feb launch irght along Goldhouse and etc. SUN 2 Tower is not selling well and with recent Thind quality I can't expect much more. Rennie doing selling since MLA is a skeleton of their former self. $1K/ft but questionable quality on recent Thind projects will bring questions. Will see how Lumina Brentwood goes when they complete.

3. Lougheed area - City of LougheedTower 2/3 is moving slow. No pricing incentives yet but at least projects is going ahead with foundations/digging going on. $1000/ft still.

4. Fiorella Richmond by Polygon one of the newer condos right near Aberdeen coming by Polygon. Trusted builder and great quality/Q+A after market support. $1000/ft or so but good amenites as expected by a lowrise 2-3BR 5-6 story build.

More later - see you all in 2020!

[Tapioca]

Something that is being forgotten here is that people do have the ability to buy more house when they make higher incomes as they enter into their late 30s and early 40s.

[Harvey Specter]

Took the plunge and submitted a suite selection form for two 1 bedroom units at Paradigm at River District. I'm keeping both units long term because I feel like once RD is completed prices will go up plus rent seems to be good.

[westopher]

Originally Posted by Tapioca

Something that is being forgotten here is that people do have the ability to buy more house when they make higher incomes as they enter into their late 30s and early 40s.

Thats not being forgotten.
Making more money doesn't mean that spending more is beneficial. It means it's less of a burden than it would have been. You know what would be more beneficial? Making more money and it costing the same.

[Ch28]

Went to an open house at the “new” Thind lowrise by 1st and Renfrew and it’s a giant piece of shit. The rooms are tiny with floor plans that don’t make sense and overall quality is absolute dog shit. I feel bad for anyone that bought into that development

[Hondaracer]

$1200/sq ft Cambie not doing well?!? What a surprise lol

What a shit location for anything really, that development really only appeals to a very small demographic.

[Mr.HappySilp]

Originally Posted by Ch28

Went to an open house at the “new” Thind lowrise by 1st and Renfrew and it’s a giant piece of shit. The rooms are tiny with floor plans that don’t make sense and overall quality is absolute dog shit. I feel bad for anyone that bought into that development

Originally Posted by JDMStyo

Happy holidays everyone! Been awhile since posted - been picking up great deals out there and certainly seeing some drastic price reductions for luxury type scenarios. Market has really recovered last 2-3 months and there's even multiple offers for reasonably priced listings.

Here are some Presales follow up 2-4 years later. Tidbits and anecdotes from deals I've come across and/or transacted.
1/ Vittorio metrotown - these have not done well. In 2017 you were a rockstar in summer if Polygon called you for these 2BR $1000/ft deals which started high $700's for 850ft around Maywood area. These are completing in 1.5years and I'm seeing below price assignments for people trying to get their money/liquidity out. LOSS
2/ Imperial metrotown - 2016 sold, 2019 completion. Listings are averaging $950-1000/ft so well up from the $800-850/ft from when it was launched in 2016. 15-25% profit. PROFIT.
3/ King George Hub Surrey - $259-299K 1BR sold out in a month back in 2017 winter 2 years ago. Assignents are happening aroud the $350-399K range, not huge profits but still in the money. PROFIT
4/ Cambie corridor Contessa - didn't do one here but in 2017 Magnum was selling out like hotcakes. I'm seeing cashloss deals here as price averaged $1200/ft along QE Park. $1.2M 2BR around 900ft people asking $950K to get out. LOSS.
5/ Onni's Belpark luxury Cambie Corridor build This is one of the best/worst deals for originally seller I've seen recently. $300K down on $1.4M place that's 1190ft 3BR. Walking away from the $300K deposit. There was about a 10% gain you can get on a near 1200+ ft place 3BR for $1.1M but it's still skinny with fees. LOSS for the original buyer.

New Presales few I've watching.
1. SOCO by Anthem Hot new presales from Anthem. They are hoping something like Station Square which is now the most successful multi-phase tower development in Canada. Right place, right time in 2013 when per ft was $500/ft. However with Coquitlam/Lougheed right now at $1,000.

2. Highline Metrotown by Thind I'm guestimating next Jan/Feb launch irght along Goldhouse and etc. SUN 2 Tower is not selling well and with recent Thind quality I can't expect much more. Rennie doing selling since MLA is a skeleton of their former self. $1K/ft but questionable quality on recent Thind projects will bring questions. Will see how Lumina Brentwood goes when they complete.

3. Lougheed area - City of LougheedTower 2/3 is moving slow. No pricing incentives yet but at least projects is going ahead with foundations/digging going on. $1000/ft still.

4. Fiorella Richmond by Polygon one of the newer condos right near Aberdeen coming by Polygon. Trusted builder and great quality/Q+A after market support. $1000/ft or so but good amenites as expected by a lowrise 2-3BR 5-6 story build.

More later - see you all in 2020!

LOL went into a low raise by Thind back in 2014 the quality is so bad we walk right out. The layout have so much wasted space (long hallways that leads to the kitchen) Shitty quality their blinds is actually made out of paper (my dad actually made a hole just by pulling the blinds normally). Shitty finish. And if you goolge Thind you will know they got lot's of complain.

[noclue]

Anecdotal but I heard that the arc by concord pacific is not doing well for flippers, especially 2 beds.

[akira112]

Originally Posted by Ch28

Went to an open house at the “new” Thind lowrise by 1st and Renfrew and it’s a giant piece of shit. The rooms are tiny with floor plans that don’t make sense and overall quality is absolute dog shit. I feel bad for anyone that bought into that development

Agree 100% and stay the F away from Thind, my sister bought into their lowrise a block away on 2nd, worst new building I ever walked into.

[twitchyzero]

$1000/sf for maywood area roflmao

[whitev70r]

Is real estate like buying a used car? Are there any decent/good buys on units that are 7-10 year old range? There are so many new units being built and everyone flocks to pre-sales. Plus, you gotta think families eventually outgrow their 1 or 2 bedroom and into a townhouse. Only thing I hate about condos and stratas are the monthly maintenance. What is best value for the buck?

[westopher]

When I was shopping 4 years ago, presales were the best value I could find. No stress, no fucking around with offers, just walk in and throw your deposit down. That ship has sailed, especially with these "investors."
I think to get a deal, finding some asshole that ended upside down on a presale flip on completion is going to be your best bet.

[shiesty]

Anybody have an opinion on the quality of Anthem properties?

[donk.]

Originally Posted by JDMStyo

Happy holidays everyon.........

I love reading your posts, no bullshit, just info. Unlike most realtors hiding their information and "news" websites posting garbage.

Thank you

[HonestTea]

Originally Posted by donk.

I love reading your posts, no bullshit, just info. Unlike most realtors hiding their information and "news" websites posting garbage.

Thank you

+1

[Mr.HappySilp]

Originally Posted by whitev70r

Is real estate like buying a used car? Are there any decent/good buys on units that are 7-10 year old range? There are so many new units being built and everyone flocks to pre-sales. Plus, you gotta think families eventually outgrow their 1 or 2 bedroom and into a townhouse. Only thing I hate about condos and stratas are the monthly maintenance. What is best value for the buck?

With a townhouse you still pay a strata fee. Only duplex and house don't have strata fees.