Vancouver's Real Estate Market

[BIC_BAWS]

So I'll be buying a place with my parents, due to our financial constraints, it doesn't make sense for me to get my own place (not like I can really afford one anyway) and for them to get their own place, just for me to move back in to take care of them in like 5-10 years. It's not an ideal situation, but it's what I'm working with.

We're approved for a 500K mortgage (legal suite would probably allow for more), have a 200-300K DP, and primarily looking at detached homes (at least 4 bed - 1 needs to be office; pref garage for my toys lol) in the Maple Ridge/Langley area (fml). We're looking at detached specifically because my parents are concerned about strata fees/unexpected $20K bills. That said, I also understand that detached has its own unexpected maintenance.

What are your experiences buying a detached? I imagine a PPI for a home as far more important than a car. How many unexpected costs am I looking at? Or rather, what are some big ticket items that you have noticed? I think inspectors range from $200-$1000, so I can see it adding up if you are looking at multiple properties. However, inspectors can probably help save tens of thousands of unexpected costs when negotiating.

Thoughts? Thanks

Also fun fact, you can cut around 4-5% off purchase price during COVID rn.

[Hondaracer]

Even in that price range and those areas you might be hard pressed..

Just saw a realtor I follow on Facebook say he sold a gross row home style place in Clayton heights for “the highest sale price for a coach home ever” at 1.1..

A place like that or maybe even in Willoughby etc may be doable and you may even be able to find a newer place with either a basement suite or a coach house out back.

Maintainence in a detached is a never ending process and the more you are able to do yourself the more money you will save. Just gardening and general exterior upkeep alone is a -Tonne- of work.

Inspections are important but you probably want to go with a relatively well respected builder either way. Consider all the things like hot water tank, furnace, washer dryer etc, are they at the end of their life cycle? Is that gonna be another 10-20k short term?

[hud 91gt]

When I had an inspector through our place it was a joke. Completely
Neglected some things which could cause major issues (water pipes using single hold downs across a 14’ garage and made big deals about some duct tape on the hood fan vent pipe.

Really I think they are a joke. I had to beg the guy to go up in the attic and check for moisture.

[Hondaracer]

Definitely, some have no idea.

Honestly I don’t even really care for the more welol-known guys who have never been in the business. Somone who has never built a house themselves will never have the experience of Somone that has. Class time means little

[JDMDreams]

800k detached is gonna be tough, unless you look further mission or Chilliwack. Town houses in Langley are easily $600k already

[BIC_BAWS]

Yeah I agree that even Langley is becoming unaffordable. I found this gorgeous detached in a strata community in "mission". I say it in quotes because it's literally more closer to Harrison Mills than proper Mission. It's literally buttfuck nowhere. Yeah, Mission/Chilliwack/Abby is in consideration as well. My commute to Richmond is going to suck ass.

[Hondaracer]

Jesus mission to Richmond.. rather find a new career I think lol

[Bonka]

I wouldn't bother with Pitt Meadows with the CPR and flood plain there. You'd be at the top of your price range in Maple Ridge and mostly relegated to West and East Maple Ridge which is fine and >30yrs old. Generally Albion and Cottonwood is preferable being further away from DT centre but listings are low now and lots of stale inventory.

It's probably better to pay someone on RS with construction knowledge to inspect rather than an inspector. I agree that at best inspectors provide a very general overview.

[twitchyzero]

jesus 250k down and looking at agassiz?
i would consider a closer townhome

[quasi]

Originally Posted by Bonka

I wouldn't bother with Pitt Meadows with the CPR and flood plain there. You'd be at the top of your price range in Maple Ridge and mostly relegated to West and East Maple Ridge which is fine and >30yrs old. Generally Albion and Cottonwood is preferable being further away from DT centre but listings are low now and lots of stale inventory.

It's probably better to pay someone on RS with construction knowledge to inspect rather than an inspector. I agree that at best inspectors provide a very general overview.

I skipped the inspection on my last home and did it myself, no ragrets!

Lol I paid for inspection on my last house before this one he missed so many basic issues that could have burned my house down, generic report what a waste of money.

[Alpine]

Originally Posted by BIC_BAWS

We're approved for a 500K mortgage (legal suite would probably allow for more), have a 200-300K DP, and primarily looking at detached homes (at least 4 bed - 1 needs to be office; pref garage for my toys lol) in the Maple Ridge/Langley area (fml). We're looking at detached specifically because my parents are concerned about strata fees/unexpected $20K bills. That said, I also understand that detached has its own unexpected maintenance.

Use Zealty.ca. You can see all active properties on the market and all selling prices for the last ~20 years. Track recent sold prices so you know which way prices are going. Prices move in different directions depending on the market segment (property type, region, etc...)

[BIC_BAWS]

Originally Posted by twitchyzero

jesus 250k down and looking at agassiz?
i would consider a closer townhome

Unfortunately townhomes are typically strata, it's really hard to find a freehold non-strata townhouse/rowhome. It's not even something you can search for as keywords on Rew. I would actually prefer to live closer and sacrifice detached. Granted, all I really want is a double garage (single is fine i just need one).

My mother doesn't drive so I don't think she understands the gravity of a 200km/day commute. FFS. Not much I can do about it tho, I'm not the decision maker, but my input matters since I'll be paying a % of mortgage as well. I also think their biggest consideration is that if we buy detached further out, the potential for property value to rise is higher. Or rather % gain.

[MarkyMark]

I wouldn't shrug off a commute like that with "what can you do". That's a horrible commute and unless you work weird hours where traffic isn't a factor the hours of your life you'll waste commuting isn't worth it. If finding another job that's closer isn't an option I'd really start talking to your parents about considering something closer so you don't hate your life.

[TOS'd]

There was a student in my program at BCIT which commuted daily from Chilliwack. He only lasted a couple of months before dropping out. He would have to leave really early to get in for 8am lecture. Sometimes he would arrive in the afternoon because of an accident on HWY 1 or just not come in altogether. That drive every morning is going to be brutal, plus the commute back.

[Euro7r]

Originally Posted by BIC_BAWS

Unfortunately townhomes are typically strata, it's really hard to find a freehold non-strata townhouse/rowhome. It's not even something you can search for as keywords on Rew. I would actually prefer to live closer and sacrifice detached. Granted, all I really want is a double garage (single is fine i just need one).

My mother doesn't drive so I don't think she understands the gravity of a 200km/day commute. FFS. Not much I can do about it tho, I'm not the decision maker, but my input matters since I'll be paying a % of mortgage as well. I also think their biggest consideration is that if we buy detached further out, the potential for property value to rise is higher. Or rather % gain.

I think you should try doing some "commutes" as though you actually live out there to see. Comparing less busy/more freely driving now due to Covid to get an idea how long the commute. Even on a Covid day, driving around 4-5pm from East Vancouver to Langley to visit my buddy, still would take me 45 minutes easily (going 20-30+ above speed limit on highway). Imagine non-covid days later on...

Also have to factor in what your mom will do. She doesn't drive, so is she solely going to be sitting at home all day? When you are moving out that far, it ain't like the city where you find a bus stop every so often in close proximity. Also say you are at work in Richmond, what if there is an emergency at home, imagine driving all the way back.

[BIC_BAWS]

I've done 4PM-5PM commutes from Richmond to Langley before COVID for client meetings. I literally have to drive like a BMW driver (30+ is avg tbh) to make it around 45mins - 1 hr. It's pretty brutal as is. Fuck LOL my whole car situation doesn't really help either.

[JDMDreams]

Richmond to Langley is ok cuz you can take highway 17 and there's not too much traffic

[Jmac]

Speaking of shitty commutes, I was doing a program when I got out of high school that had classes at Malaspina College (now VIU) and UVic, sometimes at three different classes in the same day (e.g. Nanaimo in the early morning, Duncan late morning, UVic afternoon, then back home to Duncan).

I put almost 60k on my car that year

[hud 91gt]

Originally Posted by BIC_BAWS

Unfortunately townhomes are typically strata, it's really hard to find a freehold non-strata townhouse/rowhome. It's not even something you can search for as keywords on Rew. I would actually prefer to live closer and sacrifice detached. Granted, all I really want is a double garage (single is fine i just need one).

My mother doesn't drive so I don't think she understands the gravity of a 200km/day commute. FFS. Not much I can do about it tho, I'm not the decision maker, but my input matters since I'll be paying a % of mortgage as well. I also think their biggest consideration is that if we buy detached further out, the potential for property value to rise is higher. Or rather % gain.

A freehold townhouse isn’t not possible as far as I understand. If you search for duplex/triplex, they will still be stratified but they will usually be much less formal with lower fees etc pending how the owners run it.

[Harvey Specter]

It's going to be interesting to see where prices are at in 6 months once deferred mortgages, car payments and gov't assistance is over. Also worth keeping an eye on the condo market and units owned by the investors who bought properties for the solely purpose of Airbnb.

Btw...

Big banks are tightening lending standards for real estate investors: mortgage brokers

Big lenders are tightening their requirements for real estate investors, mortgage brokers say, which could further slow activity in places such as Southern Ontario where investor demand had driven up prices and sales.

Bank of Nova Scotia, for example, is no longer allowing home buyers to use funds from a home equity line of credit for a down payment on a rental property, according to a memo the bank sent to mortgage brokers.

“For them to say, you can’t even use money in a home equity line of credit, that is a pretty big thing in our business,” said Dave Butler, principal broker with Butler Mortgage Inc., who works with real estate investors and is one of many who received an e-mail from Scotiabank announcing the changes.

Using a home equity line of credit to buy a rental property has been a common strategy for real estate investors with good credit.

Scotiabank did not comment on questions about the tighter lending standard. But a spokesman said the bank continues to work with its customers to make the right investment decisions for their portfolios while staying within its risk-appetite guidelines.

Other big lenders have become stricter with their due diligence, according to brokers, as the coronavirus crisis pummels the Canadian economy, leading to business closings and the loss of more than three million jobs since mid-March.

Before the pandemic hit, home sales in Southern Ontario and parts of Quebec and British Columbia had been soaring. The average selling price of a residential property was increasing in the suburbs and smaller municipalities as investors sought deals in cheaper markets.

But now home sales have dropped across the country. The Toronto region, the country’s biggest market, sank 67 per cent in April compared with last year, because of the economic downturn combined with physical distancing measures and health concerns.

“Banks are tightening up their real estate lending for the simple reason: People are more likely to default on an investment property mortgage than they are on an owner-occupied mortgage," said Calum Ross, principal broker with The Mortgage Management Group, who mostly works with real estate investors.

Carl Gomez, an independent real estate economist, said lenders don’t want to get stuck with bad loans. “This is completely a reflection of what is happening in the economy. Significant job losses. But it’s also specifically about the kind of jobs people may have or do that could be at risk,” he said.

The additional scrutiny by lenders will make it harder for investors to buy.

“Income, credit and property value. Those are the three things that banks look at and all three are at risk right now,” said mortgage broker Bernadette Laxamana, president of Karista Mortgage in B.C. “It is 10 times tougher now for people who can’t show much income except for their property,” she said.

For example, banks have told brokers they want to see that real estate investors have liquid assets or assets that can easily be turned into cash to cover mortgage payments if renters are unable to make their payments. They are asking to see bank deposits for rent whereas previously the borrower could simply show the rental lease agreement. Banks are also constantly reconfirming a borrower’s income. Before the pandemic, a home buyer’s income would be verified during the mortgage application.

“Some lenders might ask for an updated pay stub one to two weeks before closing to reconfirm the person is still employed,” said Elan Weintraub, a mortgage broker with Mortgageoutlet.ca. “Lenders are reviewing documents more closely and they are reducing the amount of the loan they would offer.”

Any tightening in mortgages for investors could put more downward pressure on the condo market, where investors account for more than one-third of condo owners in the Toronto and Vancouver regions. Although the average selling price remained steady across all types of homes in these two areas, the price of a condo has started to soften, falling 4 per cent in the city of Toronto.

As well, average rents are declining. The drop in resale and rental prices is occurring as an unprecedented number of condos are due to be completed this year in the Greater Toronto Area.

At the same time, investors who bought properties to rent them on Airbnb are losing business with the provincial restrictions on short-term rentals and the temporary demise of the tourism industry.

The housing market could slow further at the end of the year when homeowners have to start making mortgage payments after receiving six-month deferrals from their banks.

As of this week, the biggest banks had provided mortgage deferrals for more than 740,000 homeowners, according to the Canadian Bankers Association. The industry group could not say what share of deferrals were for primary residences versus non-primary residences or rental properties.

Spokespeople for CIBC, TD, Scotiabank and Bank of Montreal would not provide the percentage. Jill Anzarut, a spokeswoman for RBC, said the bank is “seeing typical requests for deferrals for investment properties, and they are in proportion to the makeup of our portfolio.” She did not provide further detail.

“There have been thousands of real estate investors buying negative cash flow properties, specifically condo investments where their monthly costs far exceed their monthly income on those properties and that is a very real source of concern," said Mr. Ross of The Mortgage Management Group.

https://www.theglobeandmail.com/busi...ate-investors/

[underscore]

Convert the 200km/day commute into what it actually costs in terms of fuel, vehicle maintenance, depreciation, and the value of your time. Then present that to your parents as a factor in the mortgage. Taking out weekends and stats there's around 250 working days a year.

ie 200km/day x 250 days = 50,000km
50,000km x 10L/100km = 5,000L
5,000L x $1.25/L = $6,250/yr in fuel

So if you cut the commute in half you could put the saved $3,125/yr towards the mortgage instead. Do the same with maintenance (ie a set of tires every 2 years instead of every year, there's another $500/yr), depreciation, etc and your time as well (the easy way is value your time at the rate you're paid at work). It's easy to ignore that stuff when it's spread out over every day but it adds up fast.

Or you can go for the "why do you want me in the car all day? don't you want to spend time with your son?" or something.

[jing]

A unit we're interested in is listed as having the GST already paid by the seller. However, it has never been occupied. Assuming we end up purchasing, that means GST is payable again on the final purchase price, right? eg. 700k sold price = 35k GST. Would I qualify for a GST new housing rebate, even though I'm not buying from a developer anymore?

[westopher]

Underscores advice is bang on. Driving is EXPENSIVE. Your time should also be valued. If you are getting paid lets say $30/hr, a two hour commute should be considered really at least 1.5 hours added to your work day that you aren't getting paid for (I'm not counting 1/2hr as no one realistically has a 0 minute commute time unless they have extenuating circumstances) then you need to consider your wage is essentially becoming 25.25/hr. Thats a big pay cut. Add the gas and the take home pay becomes less.
The cost of commuting really takes a chunk out of your take home pay, and therefore quality of life.

[Presto]

Originally Posted by underscore

Convert the 200km/day commute into what it actually costs in terms of fuel, vehicle maintenance, depreciation, and the value of your time. Then present that to your parents as a factor in the mortgage. Taking out weekends and stats there's around 250 working days a year.

How much is your time worth?
Time is also money.

A 200KM commute sounds like a 3 hour roundtrip on a good day.
250 days x 3 hours = 750 hours per year = 1 month spent in the car, commuting.

I commuted from Coquitlam to Richmond back in the 2000s. Hated it so much. 14 years ago, I took a pay-cut to work in non-profit. IMHO, it was the best career decision I have made. My job is <10min from home, and I don't think my stress can be lower.

Depending on the work you do, would there be any job opportunities close to the real-estate you're interested in?

[Traum]

Adding to what everyone has already said, $800k for a detached home is gonna be really, really tough. If you can somehow up your target amount to ~$1M, even if it means having to rent the basement out, that'd make for a significantly easier time to actually find a place.

As far as prices are concerned, I've had 2 friends who were able to purchase houses that were roughly ~30% - 35% cheaper than market value. Both of them were bank foreclosures. One required significant renovation throughout the house, and the other was an interesting property where the developer ran out of money somehow while building the house, so some stuff was only finished cheaply, while other non-critical items were left out.

With home inspectors, you really need to have someone who knows their stuff. In particular, I find that the best home inspectors are the ones who used to / still work in construction anyway, so they are already familiar with common problems and know where and what to look for. And then when you find someone like that, they'll point out every single glaring problem that is wrong with the building, and you'd be so scared to proceed with the purchase because of everything that he has pointed out LOL~

For myself, I'd really only bring on the home inspector when I am about to make an offer on the property. Include the home inspection as a subject on the conditional purchase when the offer to purchase is made. And then when the inspection report comes back, if it is absolutely disastrous, you abort the purchase. Otherwise, you use the inspection report as a tool to further bargain on the purchase price.

If your budget really maxes out at the $700 - $800k range, I'd personally look into townhomes in that price range. IMO, newer builds in the 5 - 10 year range in Coquitlam is potentially viable since the 10 yr old warranty still hasn't expired. Stratas are required (by law) to have deficiency reports prepared by licensed engineering firms on the building to give the strata owners an idea of upcoming costs. That'll give you a good idea of what to expect. And as I have repeatedly stressed in this thread, when there is a good strata council onboard overseeing matters in general, I'd actually trust them more than I would trust myself in managing that stuff. In my last apartment, that was exactly the situation where the strata council president was a super organized retired nurse, and the rest of the council were all level-headed people.