Vancouver's Real Estate Market

[westopher]

I think there are going to be far more people losing jobs when things reopen, as large businesses realize so many people working from home are really only doing 10-20 hours a week worth of actual shit and spending the rest of the time going skiing or whatever else they want. Still, who knows if it will be enough for the market to be affected, or if the wealthy just can snatch up the limited properties on a dip and then sell them to the poors when they catch up again.

[Hondaracer]

Originally Posted by quasi

I almost banked my equity and rented last January, felt I over paid at the time now I'm glad I made the purchase.

Couldn’t have really worked out better with your timing lol

[carsncars]

Originally Posted by JDMDreams

^^ it's because ppl who lost work wasn't really in the housing market anyways or maybe entry level, that's why we see condos are flat. Majority of the ppl buying now I think are upgrading or middle income earners who's income wasn't affected by the pandemic or maybe even benefited from it. And obviously banks aren't gonna lend to people who were recently on cerb. I think the lending system currently is strict enough that even if the rates rise back to pre pandemic we won't be seeing a huge crash maybe just slow down price increase again. Most people choose fixed rates right now since they are so cheap so even if the rates rise it makes no difference to them. And all the people who have debt is actually paying it off faster or have free cash flow due to cheaper rates.

Anecdotally, I have quite a few friends who are in well-paying jobs that aren't impacted (either are healthcare workers, or in tech and can WFH) who have made first time home purchases during the pandemic. These are people who have saved decent down payments through salary + living frugally (either with parents, or basement suite life), have managed to save even more due to decreased spending during the pandemic, and also have greater buying power due to low interest rates. A couple of them did have 1 BR condos that have appreciated decent amounts since 2016.

So they're managing to buy townhomes in the $900K-$1.2M range, and a lot of my DINK friends are even in the market for SFH in the $1.2M-$1.5M range - and looking at places like Poco, Coquitlam, Port Moody, etc. as it suits the WFH lifestyle.

[Ch28]

Originally Posted by westopher

I think there are going to be far more people losing jobs when things reopen, as large businesses realize so many people working from home are really only doing 10-20 hours a week worth of actual shit and spending the rest of the time going skiing or whatever else they want. Still, who knows if it will be enough for the market to be affected, or if the wealthy just can snatch up the limited properties on a dip and then sell them to the poors when they catch up again.

While there is truth to what you said, I also think that depends entirely on the type of work you do and if deadlines are given. Our department has an endless influx of work that comes in so as long as our KPIs are within the pre-COVID range then we're good. We're a fully digital department that has WFH since March 2020 and will continue to do so until at least Jan 2022. As long as we keep within our internal KPIs then I really don't see how our entire department can't WFH permanently going forward (after Jan 2022) or at the very least do some sort of hybrid 60/40 WFH/WFO split.

Another thing that we need to factor in the financial savings that companies will have when it comes to no longer needing to lease a massive office space.

[JDMDreams]

Also reduced hours = less expenses and less salary to pay. And everything is going up in price so probably more profits for businesses.

[westopher]

CH28, totally when the right systems are in place the wfh is going to be a cost benefit to many companies. I just know of some, and it’s a substantial some, friends who are literally finishing the expected tasks for the week in less than a day, where their coworkers will take the whole week. I think we can expect lots of company audits about productivity moving forward when things start getting normal(ish)

[SumAznGuy]

Originally Posted by westopher

CH28, totally when the right systems are in place the wfh is going to be a cost benefit to many companies. I just know of some, and it’s a substantial some, friends who are literally finishing the expected tasks for the week in less than a day, where their coworkers will take the whole week. I think we can expect lots of company audits about productivity moving forward when things start getting normal(ish)

I'm sure it isn't exactly as you described it.
If they are finishing a task that was meant to take a week, and the finished product passes, then there is a lot of questions with this company. Like why isn't everyone else taking 1 day to do the same job.
If they were w.orking in the office, why wasn't the job done in a day?

I'm sure there is more to it then something as simple as what you described

[EvoFire]

The argument goes both ways for WFH.

Some people concentrate better at home because there are no coworkers to distract them. In IT it's common for a band of coworkers to go for a 90min lunch, that's time in the middle of the day that doesn't get used for productivity. Nowadays being home, many ppl are just screwing together a 15min lunch and going back to work because lunch is no longer a social aspect of work.
My office is actively trying to schedule down time during the day so people would socialize(and not succeeding ).

Office space is also a huge thing. My company moved to a new office right when covid wfh happened. I started on March 16 grabbed my laptop and buggered home. There was LOTS of empty desks when I joined. We've since hired so many people this new office no longer has enough seats for everyone (we've doubled our head count).

It's going to be an interesting case going back to the office. There's simply no rush to if the business is functioning well/normally. I wager some companies might never go back to office. Telus was already pushing WFH pretty hard a decade ago, with covid they have minimal desires to bring back workers into an office full time.
The other thing to consider are people with kids and old people at home. The vaccine is approved for adults, but they still can't guarantee you won't carry the virus. It also won't 100% guarantee you won't get sick. I've talked to my manager about this and he understands that people with kids at home won't want to be going to the office everyday.


We are in the market for a bigger place, but fuck me is the market insane.

[Tapioca]

Face time is really important for a lot of jobs and for your reputation around the office. Sometimes being seen by others is more important than your actual performance.

I was pretty bullish around WFH last year, but now a year in, I do miss going into the office on occasion. I miss the commute (because when you have kids and a spouse, it's the only time you have to yourself) and I miss putting on sport jackets with my wingtips (Yes, I can do that at home, but it's not the same). There is tremendous value in organic conversations that only happen in-person. With WFH, every time you want to talk to someone or bounce an idea, you have to schedule a call.

A big part of my job is events such as conferences, networking events, galas, etc. Virtual events really do suck.

Anyway, where were we? $250K millennials are driving detached housing prices to the moon.

[underscore]

People work at different rates for various reasons, but when the emphasis is on getting the work completed more than just being phyiscally present from 9-5 people tend to be motivated to get things done more quickly. I work for a small company but we've been on a flex system for quite a while now and it works well. We can work in the office, we can work from home, we can work at 4am or 10pm, it doesn't matter. If I can blast through a weeks worth of work in 3 days there's motivation to do so since now the extra time is my own (provided my coworkers aren't swamped with something) instead of just dragging it out to fill a week cause I have to be sitting there anyways. I get way more done when I'm working at home, partly because I don't get interrupted by coworkers. And I'd rather spend the commute time and my lunch with my kids rather than being stuck in traffic/talking to coworkers

Or doing what an old coworker of a friend of mine would do, play Solitaire on her computer all day and then pull OT to get her work done.

[supafamous]

Put a bid of $1.6m on Monday for a 33x132 (4400sf) lot in Killarney that was $200k over assessed and the winning offer was $1.71m with no subject. Apparently they had multiple offers with no subjects (I had subject to finance since my ducks weren't in a row) for what is a teardown lot.

3 weeks earlier a lot that was 400sf bigger and a few mins from it sold for $1.6m, also a teardown.

Houses below $2m used to go for $150-200k above assessed and now are all going for $300k over or more in the past couple weeks.

[van_driver]

Originally Posted by supafamous

Put a bit of $1.6m on Monday for a 33x132 (4400sf) lot in Killarney that was $200k over assessed and the winning offer was $1.71m with no subject. Apparently they had multiple offers with no subjects (I had subject to finance since my ducks weren't in a row) for what is a teardown lot.

3 weeks earlier a lot that was 400sf bigger and a few mins from it sold for $1.6m, also a teardown.

Houses below $2m used to go for $150-200k above assessed and now are all going for $300k over or more in the past couple weeks.

They were going $300k-$400k above assessed in the first half of 2016 as well.

A lot of people that bought at that time couldn't sell till now if they wanted to break even. Wonder if history will repeat itself.

[EvoFire]

Originally Posted by van_driver

They were going $300k-$400k above assessed in the first half of 2016 as well.

A lot of people that bought at that time couldn't sell till now if they wanted to break even. Wonder if history will repeat itself.

I think there's still a bit more for it to go up before we top out. Interest rates are staying low for at least 2 more years according to BoC.

[carsncars]

Originally Posted by supafamous

Houses below $2m used to go for $150-200k above assessed and now are all going for $300k over or more in the past couple weeks.

Noticed that 3285 VICTORIA DRIVE/MLS R2539461 reported sold for $2.6M today over a list price of $1.73M and assessed value of $1.74M.

Nice location right across from Trout Lake and an extra long lot (170 ft) but wow... $850K over assessed.

[Sw0op]

Originally Posted by carsncars

Noticed that 3285 VICTORIA DRIVE/MLS R2539461 reported sold for $2.6M today over a list price of $1.73M and assessed value of $1.74M.

Nice location right across from Trout Lake and an extra long lot (170 ft) but wow... $850K over assessed.

that area's probably going through a redevelopment/rezoning i think

but still...because they allowed to build duplexes on lots its increased lot values across the board

[GGnoRE]

Another factor that is not being mentioned here is the immigration factor. Due to the pandemic, there is pent up demand for immigration from East and South-East Asian countries where relatively well-off middle and upper-class families will bring their wealth and buying power when they get here. Combine that with Canada's aggressive federal targets for immigration will put even higher pressure on local housing. The locals without high-paying jobs and without access to their parents' or grandparents' wealth are going to be the biggest 'losers' in this market. I truly feel for them.

[vash13]

YouTube

[Traum]

Originally Posted by supafamous

Put a bid of $1.6m on Monday for a 33x132 (4400sf) lot in Killarney that was $200k over assessed and the winning offer was $1.71m with no subject. Apparently they had multiple offers with no subjects (I had subject to finance since my ducks weren't in a row) for what is a teardown lot.

3 weeks earlier a lot that was 400sf bigger and a few mins from it sold for $1.6m, also a teardown.

Houses below $2m used to go for $150-200k above assessed and now are all going for $300k over or more in the past couple weeks.

Killarney is my old stomping ground and my folks are still there. I'm just floored by what you're telling us here because $1.7M for a 33 x 132 "tear down" lot is mind blowing. Even at the height of the housing boom in what... 2017 - 2018?, I think older, but totally livable, houses with lot sizes bigger than that are also in the same $1.7M range.

Originally Posted by GGnoRE

Another factor that is not being mentioned here is the immigration factor. Due to the pandemic, there is pent up demand for immigration from East and South-East Asian countries where relatively well-off middle and upper-class families will bring their wealth and buying power when they get here. Combine that with Canada's aggressive federal targets for immigration will put even higher pressure on local housing. The locals without high-paying jobs and without access to their parents' or grandparents' wealth are going to be the biggest 'losers' in this market. I truly feel for them.

Personally, I would question the immigration factor because I am under the impression that the pandemic has slowed immigration to a trickle. I have friends in Hong Kong with Canadian passports who are trying to bring their families back to Canada, but because the spouse isn't Canadian, they need to go through with immigration. According to them, immigration processing has stopped for quite some time last year. I would be surprised if that only occurred in Hong Kong.

[Hondaracer]

I thought HK was the world class city everyone wanted to live in? Vancouver? Gross

[GGnoRE]

Originally Posted by Traum

Personally, I would question the immigration factor because I am under the impression that the pandemic has slowed immigration to a trickle. I have friends in Hong Kong with Canadian passports who are trying to bring their families back to Canada, but because the spouse isn't Canadian, they need to go through with immigration. According to them, immigration processing has stopped for quite some time last year. I would be surprised if that only occurred in Hong Kong.

Unless I'm missing something, I think you are providing examples that support what I said which is: there is pent-up demand for immigration due to covid and when those immigrants eventually get here, they will be another source of demand for real estate.

Spoiler!

Originally Posted by GGnoRE

Another factor that is not being mentioned here is the immigration factor. Due to the pandemic, there is pent up demand for immigration from East and South-East Asian countries where relatively well-off middle and upper-class families will bring their wealth and buying power when they get here. Combine that with Canada's aggressive federal targets for immigration will put even higher pressure on local housing. The locals without high-paying jobs and without access to their parents' or grandparents' wealth are going to be the biggest 'losers' in this market. I truly feel for them.

Originally Posted by Hondaracer

I thought HK was the world class city everyone wanted to live in? Vancouver? Gross

Regardless of how crazy we think the prices here are, its still a value bargain compared to other world class cities. People refuse to compare Vancouver to other world class cities because of the lack of job opportunities but job market doesn't matter when the primary source of funds isn't going to be local (ie. foreign investors, immigrants with assets and income from abroad, and even locals with access to family wealth abroad).

[Gerbs]

Originally Posted by Traum

Harvey,

I always appreciate your insights on things, and your comment here is no different. The million dollar question that I think a lot of people ask is -- at what point is it overpaying, and at what point will those low rates and cheap money dry up? Since none of us have a crystal ball that can accurately predict the future, we don't really have an answer.

It is also possible that people think the factors you mentioned will continue for some time to come. Esp when it comes to low rates and cheap money, there are signs to suggest that they may yet continue for some time.

I'm curious as to what are the ramifications of low-interest environments for long periods of time. I think it's unprecedented in any country?

[Tapioca]

An article from the Globe and Mail today about a local millennial couple who was tired of renting in Olympic Village and bought a pre-sale unit at Electronic Avenue in Port Moody.

https://www.theglobeandmail.com/real...operty-market/

Millennials take their place powering the property market
KERRY GOLD
VANCOUVER
SPECIAL TO THE GLOBE AND MAIL
PUBLISHED 6 HOURS AGO
UPDATED FEBRUARY 26, 2021

Berkeley Loh, 29, and Tom Holmes, 35, have been together a few years and living in their 800-square-foot Olympic Village rental, but they always had a plan to buy. They’d seen friends and family members buying properties, and they had a fear of missing out.

“You feel behind or something, I think that has something to do with it,” said Ms. Loh, who works as a project manager for clothing company Aritzia. “Our group of friends and family, everyone is buying. We never felt like we were not going to buy. It just seemed like the next thing to do.”

Adds Mr. Holmes: “We have never bought into the fact that the millennials will be renting forever. We’d hear these things like, ‘They aren’t going to own cars — they’ll just rent cars.’ No, we want property and we want a Tesla.”

In the past year, in the midst of the pandemic, Ms. Loh and Mr. Holmes became part a trend: millennial-age people driving the property market. They put a deposit on a 1,136-sq.-ft., two-bedroom condo with a large balcony at 50 Electronic Ave. in Port Moody, with a price tag of $819,000. Among the building amenities is an office space shared among the owners, which has become a bit of a must in the new pandemic world.

They quickly discovered many others in their circle of acquaintances looking to make the leap to home ownership.

Ms. Loh has three millennial age colleagues from Aritzia also buying condos, and another colleague who’s planning on starting a family recently purchased an empty property in Port Moody with plans to build a house. Another friend has bought a rundown house and is going through renovations.

“We have three or four friends who are moving out there,” Ms. Loh said.

Millennials may not be quite so shut out of the property market as has been reported over the past few years. The cohort, whose age range is somewhere between late 20s to early 40s, is entering a phase of life where they are settling down and thinking about kids. Real estate industry observers in the Vancouver area say that millennials have been driving a super hot real estate market. The onset of the pandemic could have seen the market move in the opposite direction. Instead, within months the market picked up steam. The Real Estate Board of Greater Vancouver recently released statistics showing that January, 2021, saw a 52.1-per-cent increase in the region’s home sales over January, 2020.

Like generations before them, millennials appear to believe in home ownership. In April, 2020, Zolo, a B.C.-based digital real estate company and brokerage that collects data on the market, surveyed 2,128 respondents. It found that 16 per cent of people aged 25 to 39 planned on buying a home in 2020, and 26 per cent planned on buying in the next two to three years. Only 15 per cent of that age group said they never plan on buying property. The survey also showed that 59 per cent of millennials had been saving for a home prior to the pandemic, while 51 per cent of the older Gen-X demographic had been saving for a property purchase.

Romana King, director of content for Zolo, said that millennials have been driving the market for several years. Their chief reasons for buying are less financial than psychological, such as wanting stability and permanence. During the pandemic, there’s been a “flight to safety” psychology at play for many buyers.

“Millennials have consistently been driving the engine, whether we recognize it or not, and not for the reasons we always assume,” she says. “I think there has been a lot of, maybe, rhetoric, or a lot of communication, about how millennials are shut out of the market, and I don’t think that’s untrue, but I think that millennials have been creative about their buying.

“A couple of decades ago, my parents or my grandparents might have decided to buy a suburban home because it was more affordable, and that is not an option for millennials. But I know millennials who have purchased a rental property and they rent it out and they live closer to work, and they rent themselves.

“Or they purchased a vacation property because they want the cottage lifestyle, and they know it’s cheaper to purchase that, and they can get a mortgage on a vacation property now. And then they rent in the city.

“So there are a lot of creative ways that millennials have become property owners, it’s just not in a stereotypical way. It’s not a family home in the suburbs, slash urban home … that provides a lot of context to what we have seen in our surveys.

“We have done surveys for the last several years, and consistently we find that millennials are always in the market — which makes sense, because first-time buyers drive the market.”

Backing up the assertion that millennials are driving the market is a recent Royal LePage quarterly house price survey for the end of 2020, which showed median price increases of more than 10 per cent for two-storey houses in 64 per cent of all regions they’d surveyed in Canada.

Randy Ryalls, general manager for Royal LePage Sterling Realty in Port Moody, has said millennial age buyers have emerged as the biggest demographic in the housing marketplace in Canada.

The demographic is at an age where they are earning good incomes and are tired of paying $2,500 or so for rent.

“They are moving into the marketplace in significant numbers,” Mr. Ryalls said. “They are probably buying a condo or a townhouse, although, that said, some of them are buying a $900,000 or $1-million house further out, a decent house with a suite in the basement as a mortgage helper.”

Andy Yan, director of the city program at Simon Fraser University, said the rate of ownership within the demographic hasn’t changed much over the decades. However, he says what has changed is the type of housing that they buy, based on price and location. Historically low interest rates are also playing a major role in their decisions. He cited census figures from 1991 to 2016 that looked at residents in charge of shelter costs for the household, also known as household maintainers.

“There have always been people in that age group jumping into the market,” Mr. Yan said. “In 1991, 36 per cent of 25- to 34-year-old primary household maintainers were owners compared with 39 per cent in 2016.

“However, these numbers do not account for those who are financially sidelined and still can’t enter the field as owner or renter.”

Mr. Holmes says his friends in London are also buying; however, they’re buying in the city’s outer regions instead of the central core.

More space played a big role in their decision on where to buy, says Ms. Loh, who was raised in Vancouver but didn’t want to live in the 500-sq.-ft. of condo that her brother purchased downtown. They’d outgrown their Olympic Village rental and working at home convinced them they needed more space, says Mr. Holmes, a self-employed creative director from Britain.

Mr. Holmes says that because they haven’t been able to travel for the past year, it has helped them save for their down payment. But Ms. Loh says she has been saving her entire working life to buy a property. Mr. Holmes, who has lived in London and Dubai, hadn’t saved as much, so he got help from family for the deposit. They want to pay as much toward their down payment as possible before their condo completes in 2022. As Mr. Ryalls says, it’s relatively easy to service the debt on a condo, especially with low interest rates.

“We always said when we were renting from the start that it would be great if our money wasn’t going into this black hole,” Ms. Loh says. “We were just waiting for the right time to have enough saved.”

[supafamous]

Originally Posted by Traum

Killarney is my old stomping ground and my folks are still there. I'm just floored by what you're telling us here because $1.7M for a 33 x 132 "tear down" lot is mind blowing. Even at the height of the housing boom in what... 2017 - 2018?, I think older, but totally livable, houses with lot sizes bigger than that are also in the same $1.7M range.

It's crazy - I've been mulling for the past couple years the idea of building a house and initially wanted to build a duplex with my brother in law but he bailed a couple months ago on the idea so we starting gearing up to do it ourselves with a lot of help from our parents (they're gonna loan us some cash to help fund the build) but now that I'm ready to go get a lot the market has leaped $200-300k in a span of a couple months and I might get priced out of building a house before I can even get really started.

Last summer when I was trying to convince my BIL to build a duplex with us we were looking at 1.7-1.8m for a 6000sf lot in Killarney/Champlain Heights. Now that kind of money gets you a 4500sf lot.

FWIW, my use of "tear down" might be a bit exaggerated - the house could be lived in but it's not worth buying for anything but tearing down. 62 years old, 1600sf.

[Gerbs]

Originally Posted by Tapioca

Lots of chatter online seems to reflect that it's local buyers who are driving market activity, which means the majority are taking out mortgages that are stress-tested. We are only in trouble if mortgage rates rise above 5%. I'm not sure if I can see an environment where we are in that territory.

A townhouse in my old neighbourhood was listed at $1.1M and sold for $1.36M in less than a week. Considering the aesthetic of that property and the marketing for it, it was a probably a local millennial couple that bought it. That is what seems to be driving the market - millennials and Oregon-Trailers who are sick of living in condos and need space for their home offices, kids, and pick-ups or sports cars.

https://www.cbc.ca/news/canada/briti...ales-1.5926928

I think the population and the media are discounting Millenials buyers. We grew up in Vancouver and most of us don't want to leave Vancouver because we rather stay at home instead of moving further out east, away from our friends, family and work. So because we have the privilege to stay at home rent-free. We can stack away 70%+ savings rate and invest our $10k to 50k+/Year salaries from jobs in high school, uni, entry-level post-grad. Many of us had the opportunities and knowledge to pursue fields that have high incomes like tech, finance, engineering, healthcare, e-commerce. Many millennials also have their $40k tuition paid for as well. I think I was maybe 1 in 7 of my classmates who had to pay their own tuition?

In addition to that, most of us came from poor immigrant families so we are pretty much taught to save and start working when we are 15. So by the time, we hit 25 or 30, most of us can and will have a large chunk saved up. Add a gift from parents and you can suddenly upgrade from a 1 br condo to a 2br, TH or SFH

[JDMDreams]

Just look at rs we went from $14 an hour ballas to type r and Tesla's