Real Estate

Vancouver housing bubble?

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Dec 14, 2007
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zakarydoks wrote:
Jun 11th, 2018 4:50 pm
You cannot have market rents if the government caps your rent increase. More words does not change that. It seems you did not understand my original post.
There's no reason for ad hominem insults, friend.

Rents are set at the market rate when the paper is signed.
Rents are therefore market-dictated rents.
What we don't have is market-dictated rent increases.

Of course, you're welcome to your own opinion.
I'd love to write history... in advance.
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atomiton wrote:
Jun 11th, 2018 5:48 pm
A 4.24% tax increase on a $500,000 property is ~$100 / year
A 4.00% rent increase on $2100/mo is ~$1000 / year
What's your point? Landlords should accept erosion to their profit margins? $500K is a very cheap property. Most condos in DT are more than that. Whose condo property tax bill is $2,360? How about all the other pressure for rent increases? Maintenance fee increase, mortgage interest increase, increased demand, etc.

When government cap rent increases it will prevent landlords from raising rents to market levels. It's a very self evident concept. I don't know why you are so bothered by it. There are "loopholes" that allow landlords to bypass rent increase cap such as renovation and short term fixed lease. Landlords who use these "loopholes" to charge market rents are demonized by renters and their anti market allies in the media. Now there are talks to close these "loopholes" because renters don't want to pay market rent. We need to let market forces set rent and rental units should go to the highest bidder. That's how markets work. Highest bidders get the goods, very efficient.
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atomiton wrote:
Jun 11th, 2018 5:59 pm
There's no reason for ad hominem insults, friend.

Rents are set at the market rate when the paper is signed.
Rents are therefore market-dictated rents.
What we don't have is market-dictated rent increases.

Of course, you're welcome to your own opinion.
So market rent for year 1 then no more market rents after that. So effectively no market rents.That was not ad hom because I was critical of your strategy. You are playing word games and I called you out on it. Using wordy arguments to obfuscate the point. If landlords cannot raise rents according to market forces then we don't have market rents. Market rent, market rent increase, same thing and you know it. The purpose of not allowing market rent "increases" is because renters do want to pay market rent.
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More anti market renters lobbying for anti market government regulations.

New rules could see ‘renovicted’ B.C. tenants get year of free rent

Trying to get market value is deserving of punishment in BC. We are too anti market in Canada and that is why we have mediocre economy. Now we are doubling down on anti market polices hoping it will fix our real estate "crisis".
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zakarydoks wrote:
Jun 11th, 2018 6:33 pm
So market rent for year 1 then no more market rents after that. So effectively no market rents. That was not ad hom because I was critical of your strategy. You are playing word games and I called you out on it. Using wordy arguments to obfuscate the point. If landlords cannot raise rents according to market forces then we don't have market rents. Market rent, market rent increase, same thing and you know it. The purpose of not allowing market rent "increases" is because renters do want to pay market rent.
It's not a word game. It's explaining how contracts work. And it's not the same thing.

When you sign a rental contract with a tenant, the price ( inflation adjusted ) is set as long as the contract isn't broken. You're talking about owners being able to change the contract terms whenever they want. If we were talking about selling pez dispensers you may have a point, but you're not. The rental amount should cover expenses and enough to create a contingency fund for unexpected expenses. The rental increase covers inflation and the increase of taxes/maintenance/etc.

And remember, it's not my strategy, it's reality. It's how it is.

A landlord is free to set a rent at whatever the market will allow at the time of contract signing. Landlords are not allowed to change the contract terms. Remember, tenants are in the disadvantaged position of having to depend on another person for shelter, so the industry is regulated and contracts are unchangeable.

Cheap phone contracts where someone (usually an RFDer) has been on a month-to-month plan for years usually don't change ( and if they do, it's inflationary) and new customers don't get those plans. The phone company uses the carrot of a new phone to sign a new contract, but as long as you keep paying the bills, the carrier keeps your rent ( of the phone line ) low. And that's a phone plan... it's not messing with people's life & livelihood. Perhaps landlords who want to up the rent could offer several months of rent back in return if they want the tenant to move out.

It's true, a renter is rewarded for long-term loyalty with a rent that roughly tracks the owners expenses at the time of contract signing + inflation for increases in costs.
An owner is rewarded with a source of stable income that gradually pays off his mortgage and turns a profit without dealing with vacancy rates.

No one ever said property management was easy. It's one reason ( among others ) that I don't deal with tenants myself.
I'd love to write history... in advance.
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zakarydoks wrote:
Jun 11th, 2018 6:45 pm
More anti market renters lobbying for anti market government regulations.

New rules could see ‘renovicted’ B.C. tenants get year of free rent

Trying to get market value is deserving of punishment in BC. We are too anti market in Canada and that is why we have mediocre economy. Now we are doubling down on anti market polices hoping it will fix our real estate "crisis".
Break a contract, and you pay the price. It would have been better for the landlord to offer 6 months rent-free in exchange for the tenant terminating the contract. I'm sure they'd get more takers and I'm sure they can do the math and know that those 6-months of rent will return a profit in 2 years or less, depending on the increase.

Better to be proactive and consider it an investment. Negotiate with the tenants to raise rates to recoup the capital used. Or perhaps a sliding scale where it depends on the tenure of the tenant. If you turn to loopholes instead of good business practices when messing with people's shelter, then public opinion will turn against you.

Some of the renovictions are due to companies who purchased a building with the express purpose of renovicting. They saw a loophole and wanted to exploit it. Were there no loophole, the value of the property would be lower as they'd have to make do with the regular ebb and flow of tenants, only raising rates when moves happen. The renoviction loophole played a part in artificially increasing the value of the property.... which it sounds like they paid too much for compared to the actual income potential.
I'd love to write history... in advance.
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zakarydoks wrote:
Jun 11th, 2018 6:26 pm
What's your point? Landlords should accept erosion to their profit margins? $500K is a very cheap property. Most condos in DT are more than that. Whose condo property tax bill is $2,360? How about all the other pressure for rent increases? Maintenance fee increase, mortgage interest increase, increased demand, etc.
But it's not an erosion. A $1000 increase more than offsets the increase in property tax and for the most part, maintenance fees as well. A smart landlord would have set the initial price with a buffer to account any increases in maintenance and would raise the rent annually to keep up with inflation.

The article you said the increase would be about $94 / property on average per year... average property price in Vancouver is still above $1million. I'd say my estimates for property tax increases were pretty generous, wouldn't you?

Since increased demand is not an expense it's obviously not included.
We need to let market forces set rent and rental units should go to the highest bidder. That's how markets work. Highest bidders get the goods, very efficient.
That's how it works, yes. Vacant rental contract rates are set by the market. The landlord gets to choose the tenant and sets the price to what the market will bear.

If you're suggesting landlords should be able to increase the rent in a bidding process on a whim, then you're probably also not against banks being able to arbitrarily raise your mortgage rate on a 20-year fixed term ( Yes, I know banks don't usually do 20-year fixed terms due to all mortgages legally needing to be open after 5 years). Or simply demand the mortgage be reamortized over a shorter period at any time.... or just choose not to give you interest this month.

Unless you have a problem with contracts in general.
I'd love to write history... in advance.
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atomiton wrote:
Jun 11th, 2018 8:07 pm
But it's not an erosion. A $1000 increase more than offsets the increase in property tax and for the most part, maintenance fees as well. A smart landlord would have set the initial price with a buffer to account any increases in maintenance and would raise the rent annually to keep up with inflation.

The article you said the increase would be about $94 / property on average per year... average property price in Vancouver is still above $1million. I'd say my estimates for property tax increases were pretty generous, wouldn't you?

Since increased demand is not an expense it's obviously not included.


That's how it works, yes. Vacant rental contract rates are set by the market. The landlord gets to choose the tenant and sets the price to what the market will bear.

If you're suggesting landlords should be able to increase the rent in a bidding process on a whim, then you're probably also not against banks being able to arbitrarily raise your mortgage rate on a 20-year fixed term ( Yes, I know banks don't usually do 20-year fixed terms due to all mortgages legally needing to be open after 5 years). Or simply demand the mortgage be reamortized over a shorter period at any time.... or just choose not to give you interest this month.

Unless you have a problem with contracts in general.
It's not about contracts. Nice try. It's about anti market renters lobbying government to ban certain contract terms that the anti market renters don't like.

Landlords should be able to increase rent to market rate every 12 months or whatever it says on the contract. Renters can choose not to sign or not to renew the lease and move but instead they chose the anti market route by lobbying government. Mortgage loans are long term in nature. I use short term margin loans and the interest rates change daily and they can call the loan anytime. I'm perfectly happy with those terms. If one lender increase my interest rates I'll pay it off with a lower interest line. Lenders need to compete for my business so there's a limit to their rate increase. That is how markets works. Landlords were able to adjust rents to market rates before but anti market renters lobbied government to get that banned. That's equivalent of the government banning short term loans like LOCs or pay day loans. It's anti market.
B.C. announces legislation to close fixed-term rental loophole
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Feb 1, 2010
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zakarydoks wrote:
Jun 11th, 2018 9:40 pm
lobbying government
To be fair, on this thread there is only one poster I suspect is paid to lobby.
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quatchi wrote:
Jun 12th, 2018 12:36 am
To be fair, on this thread there is only one poster I suspect is paid to lobby.
I don't think he's a lobbyist. Like many Canadians he is just taught from birth that mediocrity is a virtue. Canada is an institutionally left leaning county so it's not surprising to see most people advocating for rent control and other left leaning policies. Most mean well. It will take years to undo if we are lucky but many are waking up mainly from getting their teeth kicked in repeatedly by immigrants from more competitive countries.
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zakarydoks wrote:
Jun 12th, 2018 1:50 am
I don't think he's a lobbyist. Like many Canadians he is just taught from birth that mediocrity is a virtue. Canada is an institutionally left leaning county so it's not surprising to see most people advocating for rent control and other left leaning policies. Most mean well. It will take years to undo if we are lucky but many are waking up mainly from getting their teeth kicked in repeatedly by immigrants from more competitive countries.
That posters logic is why rental slums happen. But history and common sense is something that just doesn't work with them.
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zakarydoks wrote:
Jun 11th, 2018 6:45 pm
More anti market renters lobbying for anti market government regulations.

New rules could see ‘renovicted’ B.C. tenants get year of free rent

Trying to get market value is deserving of punishment in BC. We are too anti market in Canada and that is why we have mediocre economy. Now we are doubling down on anti market polices hoping it will fix our real estate "crisis".
100% this is going to blow up in tenants faces. But when the electorate falls under the spell of Horgan Chavez....the end result is predictable everytime.
[OP]
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Main page updated. Now at 3 months in a row RED YoY.

Detached listings-to-sales ratio has reached a BUYERS MARKET in REBGV, so the next few months could see some sharp drops in price if people start getting desperate.

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adamtheman wrote:
Jun 12th, 2018 12:59 pm
Looks like rentals are flooding the market, and prices may be headed downwards, according to this article. Inventory is sky rocketing thanks probably to the new tax measures introduced by the NDP. Should be an interesting summer...

https://globalnews.ca/news/4267960/vanc ... tal-costs/

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This should take some pressure off the entry level housing prices as people start to do the math between mortgages and rents - especially with the recent mortgage rule changes as well as the potential for further rate increases.

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