Vancouver's Real Estate Market

[Hondaracer]

The discussion regarding pulling out equity and the “threat” of a correction is moot for most.

If you’ve owned your house for 10 years or more, I think it’s pretty safe to say that equity increase isn’t just imaginary money. You can pretty safely pull half to 3/4 of that equity out and consider it cash at this point. You’re never going to see a correction that takes that out of your pocket

[sdubfid]

I’m in the process of rezoning a property and building a carriage home. There are so many hoops and red tape to go through. It’s probably double the cost of what it should actually cost to build and taking twice as long. The new bc building codes for energy efficiency are only going to make it worse. They want an air tight space but all it takes is someone leaving a window open to cancel out all of that “green” building code. Not to mention I’m required to have a fan run 24/7 for ventilation that draws in outside air. What good is my spray foam insulation when I’m required to always be circulating in cold outside air.

Houses built in the 50s are still standing and raised families for decades. Safe electrical and smoke detectors should be priority. Not trying to reinvent the wheel with new building codes that some office workers circle jerk over.

Another thing not mentioned is the supply of money. When house prices rise you can take equity out and buy more properties which only raises prices even further. It is far too easy to access money related to real estate. Yes I provide housing to multiple families and there is a financial benefit to me but in the big picture it’s not a good thing.

[Traum]

Originally Posted by supafamous

These taxes basically treat homes as investments and if it's your primary home then it's hugely unfair to do it. Homes are NOT investments, they only became treated as such because of a lack of housing. Fix the housing, not the tax policy on them!

I've heard suggestions about taxing the gains like they're capital gains (50% of the gain would be taxable) which would be a huge penalty against people who are moving for legit reasons (for work or growing families).

Thank you, sir~! You took the words straight out of my mouth.

It is ironic that the Generation Squeeze UBC prof dude even said it himself in his surtax policy proposal that people are parking their wealth in real estates, thus driving up prices. Well, hello there, idiot! When the property is somebody's primary residence, how are they "parking their wealth" in it??? With investment properties, yes, you can say people are "parking their wealth" in that, but not primary residence.

It also comes back to the question of how an RE ownership surtax would be effective in lowering home prices. Is the (federal?) gov going to use this tax to subsidize first time home buyers? Remember they tried this already, and all it did was inflate the cost of those entry market units? The core of the problem for the Vancouver / Toronto markets is huge disconnect in supply and demand. Until you fix that, the affordability problem isn't gonna go away. Forcing existing home owners from the working / middle class to cough up more money is not going to do anything.

The Liberals government continues to deny that they plan on taxing capital gains on primary residences, but when the federal gov funds a study on this policy, I will not at all believe them on their words. If / When they deem that the policy will have a chance of not seeing too much opposition, they are definitely going to try and sneak it in.

[Hondaracer]

Almost all these “passive” homes I see built have flat roofs, as it’s presumed it’s easier to make a flat roof air right etc.

Flat roofs are incredibly hard to do correctly. Watch all these stupid passive houses be nothing but nightmares for future owners. Where as my 100 year old house has a crazy pitched roof that you basically need scaffolding to work on, it’s so steep nothing can stay on it. Moss doesn’t even grow on my roof because everything just runs right off.

[westopher]

Originally Posted by underscore

2% doesn't sound like much, but that adds up over time.

It's not a 2% tax. I'm saying that paying the proposed tax will only cost them 2% of their total equity over like 30 years.
For anyone that's purchased a home before the last 3 years, that doesn't even put a dent in the free theoretical money they have gotten.
Like supafamous said, a home is not an investment. That's why:
No one should be able to own a second, third, etc home without MASSIVE taxes.
Corporations shouldn't be able to own SFH of any kind
You shouldn't be able to own a home in Canada if more than 50% of your time is spent living in another country.
Anyone who's home has increased in value hasn't earned a penny of that equity, if we really want to go down the "homes aren't investments" path, which I do.
But, I understand capital gains tax will just fuck the homeowners that get priced out of the market they may just be moving into another house in, but that's moot because even though people talk about it that isn't happening.

[Gerbs]

Originally Posted by Traum

It is ironic that the Generation Squeeze UBC prof dude even said it himself in his surtax policy proposal that people are parking their wealth in real estates, thus driving up prices. Well, hello there, idiot! When the property is somebody's primary residence, how are they "parking their wealth" in it??? With investment properties, yes, you can say people are "parking their wealth" in that, but not primary residence.

I feel like since housing is so expensive. Your primary residence is your entire wealth since almost half your paycheque if not more is going into housing costs.

If you bought a $600 - 650K Condo at $100K salary. You're almost living pay cheque to paycheque to live in there with very little going into savings and that's why the people may see the property as parking their wealth.

[whitev70r]

^ this ... I'm surprised people aren't more understanding or compassionate. Guess there are lots of ballers here. MOST people come really close if not right up to the limit of whatever the % is for mortgage 30 or 33% in order to afford anything and with the help from Bank of mom and dad.

Yes to all the suggestions of taxing those with investment properties. That's who the governments should be targetting. Tax 2nd (or 3rd or 4th ...) homes for capital gains all you want but not primary.

[SkunkWorks]

Originally Posted by westopher

But, I understand capital gains tax will just fuck the homeowners that get priced out of the market they may just be moving into another house in

And yet those same folks are ok with non-homeowners getting priced out of ever owning a home to begin with. That old adage of if it doesn't affect me, then I don't give a fuck about you right?

[supafamous]

Originally Posted by SkunkWorks

And yet those same folks are ok with non-homeowners getting priced out of ever owning a home to begin with. That old adage of if it doesn't affect me, then I don't give a fuck about you right?

Who says I'm ok with pricing people out of the market?

[stylez2k4]

Originally Posted by sdubfid

I’m in the process of rezoning a property and building a carriage home. There are so many hoops and red tape to go through. It’s probably double the cost of what it should actually cost to build and taking twice as long. The new bc building codes for energy efficiency are only going to make it worse. They want an air tight space but all it takes is someone leaving a window open to cancel out all of that “green” building code. Not to mention I’m required to have a fan run 24/7 for ventilation that draws in outside air. What good is my spray foam insulation when I’m required to always be circulating in cold outside air.

Are you required to run a ventilation fan or a HRV/ERV?

[Tapioca]

https://twitter.com/SteveSaretsky/st...7Ctwgr%5Etweet

Footage from an open house in Coquitlam.

Here's the listing: https://www.realtor.ca/real-estate/2...rive-coquitlam

My guess this gets 20+ offers and will sell for $1.5M-ish.

[hud 91gt]

I’m going with 1.6+

[supafamous]

Originally Posted by Tapioca

https://twitter.com/SteveSaretsky/st...7Ctwgr%5Etweet

Footage from an open house in Coquitlam.

Here's the listing: https://www.realtor.ca/real-estate/2...rive-coquitlam

My guess this gets 20+ offers and will sell for $1.5M-ish.

https://www.bcassessment.ca//Propert...AwMDAzWFdSVQ== Assessed at $1.284m so good bet it'll go for at least $1.5m, wouldn't surprise me if it's 1.6m+.

Also, these people don't look like investors to me. I bet the vast majority are people who just want a roof over their heads to raise their family.

[whitev70r]

It's over in YVR and nearby burbs. Rent as cheap as you can here, buy something in a remote place that you want to retire in now (like Kicking Horse or Penticton or Summerland) and rent that place out to pay for its mortgage. Then in 30 years, you'll have a nice place to retire with hopefully some TFSA, RRSP, Pension ... and of course, CPP.

[donk.]

Originally Posted by whitev70r

^ this ... I'm surprised people aren't more understanding or compassionate. Guess there are lots of ballers here. MOST people come really close if not right up to the limit of whatever the % is for mortgage 30 or 33% in order to afford anything and with the help from Bank of mom and dad.

.

I'm not compassionate because if you are approved for 600k purchase, at 20% down, with an income of 100k gross:
That does not mean you should go and spend 600k

They heard what the bank said, go spend!

But has the buyer talked to a financial expert, heck, even their accountant, dad, mom.
Any of these will tell you doing the above, is a bad idea in regards to having savings / enjoying your life until you get a raise etc

My views are extreme, this forum is for entertainment purposes, if I butthurt anyone, sorry in advance, this is probably the only thread where I don't troll every post

[Traum]

The housing affordability issue doesn't just affect home owners though -- potentially, renting can be as expensive, or more expensive nowadays than your mortgage payments.

With the situation being like that, it makes no sense to accuse home owners of "parking their wealth" in their primary residence.

Originally Posted by Gerbs

I feel like since housing is so expensive. Your primary residence is your entire wealth since almost half your paycheque if not more is going into housing costs.

If you bought a $600 - 650K Condo at $100K salary. You're almost living pay cheque to paycheque to live in there with very little going into savings and that's why the people may see the property as parking their wealth.

[inv4zn]

Originally Posted by donk.

I'm not compassionate because if you are approved for 600k purchase, at 20% down, with an income of 100k gross:
That does not mean you should go and spend 600k

They heard what the bank said, go spend!

But has the buyer talked to a financial expert, heck, even their accountant, dad, mom.
Any of these will tell you doing the above, is a bad idea in regards to having savings / enjoying your life until you get a raise etc

My views are extreme, this forum is for entertainment purposes, if I butthurt anyone, sorry in advance, this is probably the only thread where I don't troll every post

You have a skewed perception of the word compassion then.

1. It's difficult for anyone in Vancouver under 30 to have a gross income of 100K, unless you're in tech and/or are lucky.
2. Even if you're consistently earning 100K, and if you're saving aggressively, 20% down on 600K will take at least 5 years to save unless you're lucky to have parents who give you free room and food, and in 5 years that 20% is now only worth 15%!
3. Say you managed to do all of the above, and the bank has approved you for 600K. Even at 600K you're severely limited to what you can buy. And by what you're suggesting, if at the above, if 600K is overleveraged, what do you suggest? 500K? Sorry, nothing for that price is available.

So if:
1. You have a modest job, which most young people will, then you're fucked.
2. You need to rent, you'll never be able to save 5%, let alone 20%, so you're fucked.
3. Don't have family with money? Well might as well just give up, realistically.

Entire generation of people apart from a lucky minority are fucked over just because, but no, they were ALL living outside of their means and don't deserve compassion.

[PeanutButter]

For the members talking about pulling money out of the home or that homeowners have so much equity, etc.

We do realize that taking money out isn't like selling stocks right? If you take equity out of your house, you're taking a loan out. We all understand that right?

It's not free money. It's different if you sell the house, yeah you have a huge gain. But, we're talking about regular working class people with only one house.

How are we supposed to think them taking out a $100k HELOC is not a big deal? They have to pay that back.

Am I missing something here?

Equity in a home doesn't mean anything until you sell. And if you're not selling, how is that fair to expect regular working class people to take a loan just to fund some government BS?

[Hakkaboy]

Originally Posted by inv4zn

You have a skewed perception of the word compassion then.

1. It's difficult for anyone in Vancouver under 30 to have a gross income of 100K, unless you're in tech and/or are lucky.
2. Even if you're consistently earning 100K, and if you're saving aggressively, 20% down on 600K will take at least 5 years to save unless you're lucky to have parents who give you free room and food, and in 5 years that 20% is now only worth 15%!
3. Say you managed to do all of the above, and the bank has approved you for 600K. Even at 600K you're severely limited to what you can buy. And by what you're suggesting, if at the above, if 600K is overleveraged, what do you suggest? 500K? Sorry, nothing for that price is available.

So if:
1. You have a modest job, which most young people will, then you're fucked.
2. You need to rent, you'll never be able to save 5%, let alone 20%, so you're fucked.
3. Don't have family with money? Well might as well just give up, realistically.

Entire generation of people apart from a lucky minority are fucked over just because, but no, they were ALL living outside of their means and don't deserve compassion.

Things cost $600K instead of $500K because people are stupid enough to stretch themselves out instead of paying only $500K. It's not just a supply problem, but a demand one with cheap interest rates and FOMO.

Well, it's a combination of both and it's debatable which % is which, but right now, it's a perfect storm of demand and some supply. I mean how many damn # of condo units have been built in the last 15-20 years, and compare that to # of families growth (not individual population growth). I wonder what will happen when interest rates finally do go up again, or will there be another economy meltdown to keep rates artificially low...

[westopher]

Originally Posted by PeanutButter

For the members talking about pulling money out of the home or that homeowners have so much equity, etc.

We do realize that taking money out isn't like selling stocks right? If you take equity out of your house, you're taking a loan out. We all understand that right?

It's not free money. It's different if you sell the house, yeah you have a huge gain. But, we're talking about regular working class people with only one house.

How are we supposed to think them taking out a $100k HELOC is not a big deal? They have to pay that back.

Am I missing something here?

Equity in a home doesn't mean anything until you sell. And if you're not selling, how is that fair to expect regular working class people to take a loan just to fund some government BS?

It literally is free money for those that will ever downsize in their lifetime. The only people in the housing market who are fucked are those that will ever need a larger place. Those peoples places are sub 1 million dollars, or at least 99% of them are. If you've made 1/2/3 million on your home, and you don't downsize at retirement, quite frankly, you either could afford the tax anyway, or you are making terrible financial decisions.
60-100k over 30 years ISN'T a big deal when you are in a 3 million dollar home. If you look at the tax someone in a million dollar home would potentially be paying another 1k a year.
It's always someone else responsibility to either come up with the money, or be born 10 years earlier.

[PeanutButter]

Originally Posted by westopher

It literally is free money for those that will ever downsize in their lifetime. The only people in the housing market who are fucked are those that will ever need a larger place. Those peoples places are sub 1 million dollars, or at least 99% of them are. If you've made 1/2/3 million on your home, and you don't downsize at retirement, quite frankly, you either could afford the tax anyway, or you are making terrible financial decisions.

My uncle lives in a Vancouver special all his life. He bought it for $300k. His two kids moved out, luckily they have housing, but what are you expecting him to do?

What is he supposed to downsize to that gives him the same quality of life right now? He doesn't want to live in a condo because he wants a yard and doesn't want to deal with an elevator.

Is he supposed to find a townhouse where he has to share walls and space with neighbours?

He makes about $20/hour working in a warehouse and his wife works in an office making about the same. They live modestly and probably have a couple hundred thousand in investments.

You're suggesting they should sell their house and change their lifestyle? They just want to retire, look after their grandkids, but also stay in their home. Why should they need to downsize?

I don't think your assessment is taking into account everyone's position.

[Hondaracer]

And at these rates, it is ALMOST free.. even on locked in rates.

[Harvey Specter]

Originally Posted by PeanutButter

For the members talking about pulling money out of the home or that homeowners have so much equity, etc.

We do realize that taking money out isn't like selling stocks right? If you take equity out of your house, you're taking a loan out. We all understand that right?

It's not free money. It's different if you sell the house, yeah you have a huge gain. But, we're talking about regular working class people with only one house.

How are we supposed to think them taking out a $100k HELOC is not a big deal? They have to pay that back.

Am I missing something here?

Equity in a home doesn't mean anything until you sell. And if you're not selling, how is that fair to expect regular working class people to take a loan just to fund some government BS?

Bingo.

[sdubfid]

Originally Posted by stylez2k4

Are you required to run a ventilation fan or a HRV/ERV?

No, the rules change for that. this is for radiant floor heat with no ductwork. It’s a 2000sq ft garage with living quarters.

[westopher]

Originally Posted by PeanutButter

My uncle lives in a Vancouver special all his life. He bought it for $300k. His two kids moved out, luckily they have housing, but what are you expecting him to do?

What is he supposed to downsize to that gives him the same quality of life right now? He doesn't want to live in a condo because he wants a yard and doesn't want to deal with an elevator.

Is he supposed to find a townhouse where he has to share walls and space with neighbours?

He makes about $20/hour working in a warehouse and his wife works in an office making about the same. They live modestly and probably have a couple hundred thousand in investments.

You're suggesting they should sell their house and change their lifestyle? They just want to retire, look after their grandkids, but also stay in their home. Why should they need to downsize?

I don't think your assessment is taking into account everyone's position.

Yes, I am suggesting they do that. Why live modestly when you can be handed 200% of the money you've made your entire life in a single transaction. Why work if you want to retire and take care of your grandkids.
Regardless of whether they do or not, they also can defer property tax when they retire, meaning they don't have to pay a penny of it, and when the kids inherit it they would be on the hook for 40k of the 1.7 million dollar home they just inherited. There are pretty easy solutions here.
I want a house too. What am I supposed to do. Not have a yard? Use an elevator?
I have to do those things and I don't end up with a million in my pocket for doing so.