Vancouver's Real Estate Market

[MarkyMark]

Yeah pick your poison, cheap furniture or a place to put it in lol.

[westopher]

Add up everything you own and see if it costs as much as your home lol.

[supafamous]

https://vancouversun.com/opinion/col...nyone-says-eby

VICTORIA — Housing Minister David Eby is rejecting calls for more housing taxes, saying a “massive” increase in the housing supply is his preferred route to improve housing affordability in B.C.

“No tax policy is going to put a roof over someone’s head,” Eby declared this week in fending off calls for the New Democrats to bring in new taxes and thereby discourage demand.

The proposal from UBC-based Generation Squeeze for a surtax on homes valued at more than $1 million?

“I don’t agree,” Eby told Stephen Quinn on CBC’s Early Edition Monday. “We are trying to reduce costs for families right now, and many people are struggling across the province.”

Reduce access to the homeowner grant by means-testing or lowering the $2 million eligibility threshold?

“What’s suggested is an increase in taxes on those homeowners, and we’re just not interested currently in increasing taxes that way,” said Eby.

“We’ve increased taxes on behaviours that are leading to problems in the housing market,” said the housing minister. He citing the speculation and vacancy tax and a property surtax on homes worth $3 million or more, which disproportionately hit residents of his riding of Vancouver Point Grey.

“But keep in mind that the majority of British Columbians are, in fact, homeowners — 64 per cent of people in Vancouver are homeowners still, in the most expensive market.

“And so you’re talking about a broad-based middle-class tax increase at a time when costs are going up all across the board for British Columbians. We’re not going to do it.”

Rather, Eby will spend the year concentrating on supply, supply and supply.

“We need a massive housing boom in rental housing and in housing for purchase, and we need our cities on side for that,” he said Monday. “It’s not just Vancouver, it’s across the entire province. So that’s the core of the issue … it’s not really about the homeowners grant.”

Later in the week Eby expanded on his “profound concern about the housing that we are not building” and what he proposes to do about it.

B.C. is experiencing its biggest population influx in decades. Some 50,000 newcomers arrived here from elsewhere in Canada and from outside the country in the first six months of 2021 alone — and this at a time when, as Eby notes, there were only 6,000 real estate listings active at the end of last year.

“Those are the numbers that keep me up at night,” he told Simi Sara on CKNW on Thursday. “And things are going to get worse unless we start building the necessary housing.”

Adding to his frustration is the spectacle of hundreds of units of needed housing being stalled or rejected outright in communities like Surrey, Penticton and North Vancouver.

Or take the case of the Broadway subway line.

The provincial and federal governments are covering most of the cost of the almost $3 billion cost of the SkyTrain extension and construction is underway. But Vancouver has yet to approve the plan to add “thousands and thousands of units” of rental housing along the route.

At this rate, says Eby, “the subway is going to be done before the Broadway corridor plan is approved.”

While not concealing his disappointment with some local governments, Eby says the province has made progress dealing with others to increase the housing supply.

He cites provincially funded plans to identify local housing needs as a first step toward zoning for the right mix of housing in the right places.

But he worries about the lack of “a common understanding across the province — that we need this housing approved when it comes forward.”

So even as the province remains committed to working with local governments, it is also studying how other jurisdictions — New Zealand, California, Massachusetts — have grappled with municipalities “that are unwilling to approve the necessary housing.”

Some of those possibilities were set out in last year’s report of a joint-provincial commission on housing supply and affordability, headed by former NDP finance minister Joy MacPhail.

The commission urged the province to intervene legislatively to expedite housing approvals, reduce development cost, and curb not-in-my-backyard (NIMBY) opposition at the local level.

Such measures are under consideration, albeit cloaked as an effort to help local government resist the forces of NIMBY.

“We have to support municipalities in being able to stand up to folks who say ‘we don’t want any more people living here,’” Eby said Thursday. “We are in the midst of a very serious housing crisis. Communities should have a say about where the housing goes, but not whether it goes.”

He also supports diluting single-family zoning by allowing homeowners to “build more density if they choose to do that.”

This being a civic election year, Eby said that the province remains committed to working “co-operatively” with local governments.

But he warns, “if that’s not successful, we are prepared to take those additional steps if necessary.”

So, it seems the housing minister is running out of patience.

Eby, who is also the attorney-general in the NDP government, suggested in both radio interviews this week that the province is preparing to go it alone on housing in the fall session of the legislature.

The house sits starting Oct. 3. Local government election day is Oct. 15.

Once the civic campaigns are out of the way, I expect Eby will introduce legislation to expedite development of much-needed housing in B.C. municipalities.

He's right.

[hud 91gt]

The “20%” interest rate thing is always a funny argument. Considering the house costs what a down payment for a condo does… and likely similar salaries. Meaning who cares what the interest is. So just pull up your pants and be a little more financially responsible

I remember my dad bought a condo after my parents split for 60k. Due to bad luck and bad desicions. He still doesn’t own anything today.

[68style]

He's super right.

[68style]

Originally Posted by hud 91gt

The “20%” interest rate thing is always a funny argument. Considering the house costs what a down payment for a condo does… and likely similar salaries. Meaning who cares what the interest is. So just pull up your pants and be a little more financially responsible

I remember my dad bought a condo after my parents split for 60k. Due to bad luck and bad desicions. He still doesn’t own anything today.

It's not a funny argument at all, my dad's salary at the time was $30k... in a similar type job when he left that company it was $140k

Inflation matters. Interest rates matter massively when it's a mortgage. People everywhere around me where I lived were defaulting on their places because they weren't even paying their principal anymore, lots of them had to just walk away with nothing and declare bankruptcy. You ever hear of anyone doing that today?

The only reason my dad was able to buy a house at that point in time was because my grandma had enough saved up from her husband's life insurance and picking strawberries she was able to loan what he couldn't cover from selling our townhouse we were in and he agreed to pay her 8% interest on top.

Can you imagine a kid borrowing money from their parents now and thinking 8% was a deal? Practically a loan shark in today's age hahaha

Again, obviously housing prices are unfair now being 20x a good salary instead of 5x... but there were other factors in play that aren't being appreciated as well that made things pretty miserable at the time for a LOT of people.

[GGnoRE]

Originally Posted by supafamous

https://vancouversun.com/opinion/col...nyone-says-eby



He's right.

Of course, an inefficient tax policy like the broad-based 1m+ tax idea is not going to be effective because:

1) Regular homeowners who are using their sole property as principal residence aren't suddenly going to sell their homes thereby increasing supply. Or, if we are discouraging people from buying homes by raising the cost of ownership, are we really solving the housing problem?

2) For investors with pockets that are deep enough to own multiple properties, 0.5~1% tax is a papercut that can be assumed as a cost of doing business when historically they've been rewarded by 10~20% total return per annum.

What we should be doing instead is specifically targeting speculative investors. Imagine how many homes will be available to regular homeowners when 1 in every 5 homes have been bought by investors from 2014.

On another thought, I wonder if David Eby is the best person to solve the housing crisis as the housing minister. He represents the Vancouver Point-Grey riding where his constituents own one of the most expensive real estate in GVA (average listing is over 6.8m with an average transaction price of 3.5M). I am not questioning his character but will he truly pursue every avenue possible to tackle the housing crisis at the cost of his constituents who have the most to lose in a real estate market downturn.

[Hehe]

I agree with Eby on his opinion of supply. The market is the way it is because we have so little supply. When you have enough supply to absorb both investors and residents, the price would go down as there wouldn't be more competition.

And really, the step that one must go through to build anything is ridiculous.

We should streamline the process where one single point is in charge of everything and as long as conditions are met, to be able to start building.

I'm not talking about building skyscrapers in the middle of Point Grey, but say someone with a big enough lot wants to convert from SFH to a duplex, that should be granted without having to go through a tedious loop of rezoning, development planning... etc. Those are a 6-12mth process if one is lucky. We have implemented so much restriction on zoning that something like going from SFH to duplex is not possible unless a rezoning application takes place. It's all soft-limit on development.

Instead, we should focus solely on the hardware part... is the lot big enough? Can the infrastructure in place (roads, service lines... etc) support the expansion of density? Is the area's environment (green space) being kept in line? Only limit it when the hard part doesn't support it.

[68style]

Originally Posted by GGnoRE

On another thought, I wonder if David Eby is the best person to solve the housing crisis as the housing minister. He represents the Vancouver Point-Grey riding where his constituents own one of the most expensive real estate in GVA (average listing is over 6.8m with an average transaction price of 3.5M). I am not questioning his character but will he truly pursue every avenue possible to tackle the housing crisis at the cost of his constituents who have the most to lose in a real estate market downturn.

Did you read the whole article? ""We’ve increased taxes on behaviours that are leading to problems in the housing market,” said the housing minister. He citing the speculation and vacancy tax and a property surtax on homes worth $3 million or more, which disproportionately hit residents of his riding of Vancouver Point Grey."

[6thGear.]

The only property that shouldn't have any tax (other than property tax) is primary residence. But everything after should have a tax system in place. Government can try to tax their way to a solution but reality sellers will just want a higher sale price to help cover the extra costs

[68style]

Originally Posted by 6thGear.

The only property that shouldn't have any tax (other than property tax) is primary residence. But everything after should have a tax system in place. Government can try to tax their way to a solution but reality sellers will just want a higher sale price to help cover the extra costs

I don't own any secondary properties, so I don't have any investment in whatever is decided... but doesn't that just make rents higher? Any cost to an owner of a secondary residence just gets folded up into the rent to cover it. There seems to be an expectation developing that people who own secondary properties should lose money monthly and offer affordable rents even though it might only cover 50-75% of their monthly mortgage cost... but that is never going to be the case and why would it be?

[GGnoRE]

Originally Posted by 68style

Did you read the whole article? ""We’ve increased taxes on behaviours that are leading to problems in the housing market,” said the housing minister. He citing the speculation and vacancy tax and a property surtax on homes worth $3 million or more, which disproportionately hit residents of his riding of Vancouver Point Grey."

Fair point; missed that part to be honest

[underscore]

I'm curious how Kelowna will change in comparison because here the city has been approving massive projects like crazy, with zero regard for the impact to the rest of the infrastructure. Within a 5 block radius of my place they're putting in several thousand apartments. Meanwhile there's a bunch of land near major intersections with fuck all happening to it.

[bcedhk]

Provincial government needs to step in and axe all the red tape involved in the Local Government Act to speed up Rezoning's and Development Applications. Supply will not improve if that doesn't happen because you have Councillors and City Staff who have huge egos or only care about their popularity ratings.

the average wait time for a infill development permit in Vancouver is over 6 months....

[GIZZ]

Watch them approve and build NYC still subsidized housing projects. Highrises everywhere. Then give it a few years for the crime to kick in.

[Traum]

Originally Posted by 68style

I don't own any secondary properties, so I don't have any investment in whatever is decided... but doesn't that just make rents higher? Any cost to an owner of a secondary residence just gets folded up into the rent to cover it. There seems to be an expectation developing that people who own secondary properties should lose money monthly and offer affordable rents even though it might only cover 50-75% of their monthly mortgage cost... but that is never going to be the case and why would it be?

The primary concern for investors is ROI. When the ROI from a given form of investment is too low to be attractive (compared to other forms of investment), investors will take their money elsewhere. With secondary properties, ROI primarily comes from:

1. capital gain from the property
2. rental income from the property

To prevent investors from getting good ROI through RE without royally screwing the renters, a policy would have to focus on #1 without massively affecting #2.

So I guess the means to achieve this is to tax the bejesus out of capital gains from secondary properties?

[hud 91gt]

Originally Posted by 68style

It's not a funny argument at all, my dad's salary at the time was $30k... in a similar type job when he left that company it was $140k

Inflation matters. Interest rates matter massively when it's a mortgage. People everywhere around me where I lived were defaulting on their places because they weren't even paying their principal anymore, lots of them had to just walk away with nothing and declare bankruptcy. You ever hear of anyone doing that today?

The only reason my dad was able to buy a house at that point in time was because my grandma had enough saved up from her husband's life insurance and picking strawberries she was able to loan what he couldn't cover from selling our townhouse we were in and he agreed to pay her 8% interest on top.

Can you imagine a kid borrowing money from their parents now and thinking 8% was a deal? Practically a loan shark in today's age hahaha

Again, obviously housing prices are unfair now being 20x a good salary instead of 5x... but there were other factors in play that aren't being appreciated as well that made things pretty miserable at the time for a LOT of people.

What I’m trying to say, is one could save for a proper down payment on a house in the 80’s. one wouldn’t put down a minimum down payment. I’m not sure about your fathers job, but average salaries haven’t changed that much.

[MarkyMark]

Anyone with a union job that didn't blow their paycheck on cocaine could have a house in the 80s, I know plenty of those people my old man being one of them. Sacrifices were definitely made in other areas, like a piece of shit car and used appliances, but the option for only one parent to work and still buy a house was there.

[68style]

Agreed, my mom never worked... that's a pipe dream now. I feel bad for any guy who has some princess wife who decides she can stop working nowadays.... unless their job didn't pay as much as it costs for daycare... that's a different story.

[Hondaracer]

Honestly it’s pretty much a pipe dream anywhere these days. You couldn’t buy a detached home in Kamloops without dual incomes. Even “fringe” communities like summer land, peach land etc. detached are hitting a million +

[Tapioca]

Originally Posted by 68style

Agreed, my mom never worked... that's a pipe dream now. I feel bad for any guy who has some princess wife who decides she can stop working nowadays.... unless their job didn't pay as much as it costs for daycare... that's a different story.

There is still a significant minority of women who don't work after having kids because they had low paying jobs before having kids or they married rich. This is probably why the average household is so angry and not able to secure housing.

[Hakkaboy]

Originally Posted by Traum

The primary concern for investors is ROI. When the ROI from a given form of investment is too low to be attractive (compared to other forms of investment), investors will take their money elsewhere. With secondary properties, ROI primarily comes from:

1. capital gain from the property
2. rental income from the property

To prevent investors from getting good ROI through RE without royally screwing the renters, a policy would have to focus on #1 without massively affecting #2.

So I guess the means to achieve this is to tax the bejesus out of capital gains from secondary properties?

To be effective and remove all possible loopholes, they should just tax capital gains on all RE including primary residences. We all know people who buy a place, live in it for 6 months, and then flip it.

Before the pitchforks come out, I am a home owner, and capital gains is only taxable on 50% anyways. Which means that if you sell your house for $100K more than you bought it for, then 50% marginal tax rate at 50% of taxable value = 25%. So this means you will be pay 25K (25%) out of the $100K in gains. I think that 25% should be pretty close to what most people would pay in average income taxes anyways, so really, it's no different than any other source of income.

Yes, I understand that you will now only "keep" $75K, less property transfer taxes, less RE commissions, so you won't make as much as before. Well tough shit, because this is your primary residence so you shouldn't be trying to cash/flip on it anyways. I truly believe the reason why RE is so high is because most people who stretch themselves out keep buying into the bubble to chase capital gains, including investors who rent out their properties. They think it's "worth it" now because in a couple of years, it will be worth +20% more, so they are willing to pay the high prices today. Reduce away those capital gains, without really introducing any new taxes, and the demand side, or at least the demand to pay ridiculous prices should decrease and will have a ripple effect of downwards pressure on pricing.

[westopher]

Capital gains taxes will just force people to hold or ask outrageous selling prices which may impact supply or push the market higher.
Taxes should be made to impact people keeping those 2nd and above homes, not selling them. Impact that group and see a flood of those properties hit the market. Supply goes up, prices go down. The option of continuing to hold comes with a financial hit which makes it less desirable.
The "add supply" argument is just like the "hire more doctors and nurses! Build more hospitals!" argument with covid. Good luck. Cant wait until 2073 when we get it all sorted.

[Great68]

Originally Posted by Hakkaboy

, because this is your primary residence so you shouldn't be trying to cash/flip on it anyways.

Nah, I have no problem with people flipping their primary residence. They're taking the risk that they'll mis-judge or mis-time and take a bath on it.

Or they're reno-flippers, which I believe we need. They're still taking a risk on the work, and ultimately providing a needed service in upgrading homes.
I have several on my street that are in the middle of this right now, and the end result is that adds to my street looking better.

If you want to tax capital gains on primary residences, then I should be able to write off my mortgage interest as an expense. like they do in the USA

[Hondaracer]

Originally Posted by westopher

Capital gains taxes will just force people to hold or ask outrageous selling prices which may impact supply or push the market higher.
Taxes should be made to impact people keeping those 2nd and above homes, not selling them. Impact that group and see a flood of those properties hit the market. Supply goes up, prices go down. The option of continuing to hold comes with a financial hit which makes it less desirable.
The "add supply" argument is just like the "hire more doctors and nurses! Build more hospitals!" argument with covid. Good luck. Cant wait until 2073 when we get it all sorted.

Well, much like the doctors/nurses argument, how long can we go on with politicians and policy makers throwing their hands in the air saying “oh what shall we do?!?!” Instead of actually enacting change in the system with the focus on the future.



Bite the bullet, zone every single family lot for multi family development, build more coops through taxation, incentivize building subsidized housing, whatever. It’s not on your average joe to figure out but clearly the wrong people have been in place for a LONG time to address these issues even remotely.