Real Estate

Vancouver housing bubble?

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  • Aug 21st, 2019 1:28 pm
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Sr. Member
Dec 30, 2012
853 posts
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Toronto
So, Kennedy Stewart won by a razor-thin margin.

Will he govern in the interests of Canadian citizens (living in Vancouver) or, as the previous mayor, govern in the interests of overseas money launderers?

As an aside, the fact that someone can be elected mayor with 29% of the vote is nuts. Ideally there should be a run-off election between the top two candidates. Though that's clearly a topic for another forum.
Deal Guru
Jan 27, 2006
11105 posts
4508 upvotes
Vancouver, BC
civiclease wrote:
Oct 21st, 2018 1:51 pm
So, Kennedy Stewart won by a razor-thin margin.

Will he govern in the interests of Canadian citizens (living in Vancouver) or, as the previous mayor, govern in the interests of overseas money launderers?

As an aside, the fact that someone can be elected mayor with 29% of the vote is nuts. Ideally there should be a run-off election between the top two candidates. Though that's clearly a topic for another forum.
Stewart has already basically stated that he will continue with the Vision platform during his campaign so it's more of the same for the next 4 years.
Sr. Member
Dec 30, 2012
853 posts
911 upvotes
Toronto
craftsman wrote:
Oct 21st, 2018 2:52 pm
Stewart has already basically stated that he will continue with the Vision platform during his campaign so it's more of the same for the next 4 years.
Well that's unfortunate. I guess it's time to buy the Vancouver dip?
Deal Fanatic
Feb 9, 2009
7726 posts
4662 upvotes
civiclease wrote:
Oct 21st, 2018 3:35 pm
Well that's unfortunate. I guess it's time to buy the Vancouver dip?
Why would he purposely mess with homeownership equity?

Only a socialist pig like Ndp does and people are already getting sick of them... all those idiots talk about is tax, tax, tax, very little on growth plans through economic means ... a one term party.
Sr. Member
Dec 30, 2012
853 posts
911 upvotes
Toronto
Sanyo wrote:
Oct 21st, 2018 6:02 pm
Why would he purposely mess with homeownership equity?

Only a socialist pig like Ndp does and people are already getting sick of them... all those idiots talk about is tax, tax, tax, very little on growth plans through economic means ... a one term party.
It's not about purposely messing with homeownership equity. It's about enforcing the law in regards to money-laundering and tax evasion.

Or do you think law enforcement should do nothing if it offends the sensibilities of homeowners (most of whom, by the way, own nothing at this point aside from a whack of debt to the bank)?
Deal Guru
Jan 27, 2006
11105 posts
4508 upvotes
Vancouver, BC
In the Vancouver Sun over the weekend, Douglas Todd published his latest editorial on housing - Douglas Todd: Condos changed Metro Vancouver forever, for better and worse. I do realize that his views are not supported by some but there's a few tidbits that are interesting if you read between the lines.
Now roughly one out of three residents of the region live in a condominium. Metro Vancouver has about 600,000 condo units, with the city of Vancouver having 130,000 of those. The province in total has about 900,000 units, according to the Condominium Homeowners Assoc. of B.C.
So, about 1.8 million people in the Metro Vancouver area live in a condo (3 x 600,000 units) - if you use very rough math and make the assumption that all units are lived in. Now if you add in the current population estimate of Metro Vancouver at roughly 2.5 million (2.436 million in 2016 so add a few tens of thousands), you get 700,000 who don't live in condos... think about that for a minute.
It’s hard to obtain hard province-wide figures on the number of investor-owned apartments. But one reliable report to Vancouver City council, based on B.C. Assessment data, found 35 per cent of condo units in the city were owned by investors.
So, approx 45,500 out of the 130,000 Vancouver condos are owned by investors. If you take that trend and add some wide variation (let's say between 25% and 45%) to the rest of Metro Vancouver, you wouldn't be far off to think that between 150,000 to 270,000 of the 600,000 Metro Vancouver condos are owned by investors. Even if you say that 45% is a bit high and limited that number to 150,000, that seems like a lot of condos owned for investment purposes.
Tony Gioventu, executive director of the Condominium Homeowners Association of B.C., said it’s reasonable to estimate 35 to 40 per cent of the province’s strata units are investor owned. That would mean more than 300,000 apartments are not lived in by those who bought them (whether using money made in a Canada or transferred from foreign lands).

The majority of investor-owned units are rented out, said Gioventu, especially since 2010, when the B.C. Liberals changed the law to allow developers to designate most new units as rentable for 100 years.
But the condo owners association seems to agree with the assessment on the numbers. Thanks to a previous BC Liberal government, most units are rentable since 2010.
Another result of investment and speculation is that many units remain empty, even in the midst of Metro’s housing and rental affordability crisis. There are hundreds of condo towers in Vancouver’s downtown core, and Gioventu estimated 25 to 35 per cent of their units are vacant.
So, one in three condos in many downtown condo towers are empty according to that same condo owner's association. That's a lot of high priced real estate that's either going to have a heavy tax bill with the empty homes tax AND/OR heavy mortgage bill as the rates continue to edge upwards.
Deal Addict
Apr 10, 2011
1245 posts
737 upvotes
Vancouver
October 23, 2018
Vancouver Sun
Luxury home sales drop 35% in Vancouver and Toronto; high-end condo sales up

In an annual report, realty brokerage Re/Max says sales of single-detached homes priced from $1 million to $2 million fell 35 per cent from a year ago in both Toronto and Vancouver.

Single-detached homes in the $2-million-to-$3-million range were down 50 per cent in Toronto and 22 per cent in Vancouver.

Homes that were sold for more than $3 million dropped 44 per cent in Toronto and 45 per cent in Vancouver.

https://vancouversun.com/business/real- ... o-sales-up


If the higher end houses drop this rapidly, it tells me they were investors that wanted out. There must be a lot of them.

Foreign buyer taxes and other investor disincentives do get shaken out with a return to owners who really do live and work in the city.


.
Last edited by RxMills on Oct 23rd, 2018 1:01 pm, edited 2 times in total.
Deal Addict
Apr 10, 2011
1245 posts
737 upvotes
Vancouver
Excellent analysis.
Well done.
It's going to get interesting as interest rates continue to rise.

In other news... Vancouver's new mayor is a renter. It's going to be interesting to see how things evolve.
craftsman wrote:
Oct 22nd, 2018 1:35 pm
In the Vancouver Sun over the weekend, Douglas Todd published his latest editorial on housing - Douglas Todd: Condos changed Metro Vancouver forever, for better and worse. I do realize that his views are not supported by some but there's a few tidbits that are interesting if you read between the lines.



So, about 1.8 million people in the Metro Vancouver area live in a condo (3 x 600,000 units) - if you use very rough math and make the assumption that all units are lived in. Now if you add in the current population estimate of Metro Vancouver at roughly 2.5 million (2.436 million in 2016 so add a few tens of thousands), you get 700,000 who don't live in condos... think about that for a minute.



So, approx 45,500 out of the 130,000 Vancouver condos are owned by investors. If you take that trend and add some wide variation (let's say between 25% and 45%) to the rest of Metro Vancouver, you wouldn't be far off to think that between 150,000 to 270,000 of the 600,000 Metro Vancouver condos are owned by investors. Even if you say that 45% is a bit high and limited that number to 150,000, that seems like a lot of condos owned for investment purposes.



But the condo owners association seems to agree with the assessment on the numbers. Thanks to a previous BC Liberal government, most units are rentable since 2010.



So, one in three condos in many downtown condo towers are empty according to that same condo owner's association. That's a lot of high priced real estate that's either going to have a heavy tax bill with the empty homes tax AND/OR heavy mortgage bill as the rates continue to edge upwards.
Deal Guru
Jan 27, 2006
11105 posts
4508 upvotes
Vancouver, BC
RxMills wrote:
Oct 23rd, 2018 11:26 am
Excellent analysis.
Well done.
It's going to get interesting as interest rates continue to rise.

In other news... Vancouver's new mayor is a renter. It's going to be interesting to see how things evolve.
What makes things a bit more interesting is if you factor in that there are approx 550,000 houses/duplexes/townhouses in Metro Vancouver according to Metro Vancouver's own statistics as of 2016. Which means if you believe in the narrative from various parties that very few empty homes - ie condos, houses, duplexes... - then using the numbers above, 700,000 people live in 550,000 houses/duplexes/townhouses as there are no empty homes. Of course, that number is ridiculous as anyone who has an empty home on their block or complex knows.

What does it mean in the end?

If you take a home for it's intended purpose - ie physical shelter over someones head - then, there's not enough heads for the amount of inventory we have regardless if we talk about houses, condos, duplexes, townhouses.... And more supply of condos are coming online every month....
Deal Guru
Jan 27, 2006
11105 posts
4508 upvotes
Vancouver, BC
Here's an interesting article on just where the current mindset of foreign buyers are - Exclusive: Chinese buyer interest in Metro Vancouver real estate soars again

Highlights:
The number of inquiries on Metro Vancouver real estate between July and September exceeded even the height reached in 2017’s first quarter, the international property portal reported in response to an inquiry by Glacier Media
Carrie Law, CEO and director of Juwai.com, said: “Our inquiry data shows that Chinese demand plummeted during the first half of the year. This matches the official data showing that foreign buying in Greater Vancouver was down to just one per cent of activity in the first half of 2017. In the second quarter, Chinese buyer demand actually hit its lowest level since early 2015. It’s like a sinkhole opened up and swallowed all the buyers. That was the result of several quarters of plunging demand.”

A dramatic increase in inquiries turned this around in the third quarter, with searches up 130.8 per cent from the trough seen in Q2, and up 30.4 per cent over the third quarter of 2017.
Common public perception is that Chinese buyers seek out high-priced properties to invest huge sums of cash, but this is not borne out by Juwai.com’s data. The website reported that the average inquiry price for Chinese buyers in Metro Vancouver area in 2018 so far is $831,000.
So, from the looks of it, the current interest is in the condo area given the average price.
Deal Addict
Oct 7, 2007
4774 posts
1589 upvotes
craftsman wrote:
Oct 23rd, 2018 4:32 pm
What makes things a bit more interesting is if you factor in that there are approx 550,000 houses/duplexes/townhouses in Metro Vancouver according to Metro Vancouver's own statistics as of 2016. Which means if you believe in the narrative from various parties that very few empty homes - ie condos, houses, duplexes... - then using the numbers above, 700,000 people live in 550,000 houses/duplexes/townhouses as there are no empty homes. Of course, that number is ridiculous as anyone who has an empty home on their block or complex knows.

What does it mean in the end?

If you take a home for it's intended purpose - ie physical shelter over someones head - then, there's not enough heads for the amount of inventory we have regardless if we talk about houses, condos, duplexes, townhouses.... And more supply of condos are coming online every month....
According to the 2016 Stats Can census data, there were 25k empty homes in the City of Vancouver municipality proper. The City of Vancouver came out with their own report shortly afterwards and said there were only 8.5k homes based on the empty homes tax data. If I had to pick one, I have more faith in Stats Can but

https://www12.statcan.gc.ca/census-rece ... ll&TABID=1

https://globalnews.ca/news/4068194/vanc ... homes-tax/

And that was 2016. I can only assume that the number of empty homes has increased since.
Deal Addict
Oct 7, 2007
4774 posts
1589 upvotes
craftsman wrote:
Oct 23rd, 2018 7:40 pm
Here's an interesting article on just where the current mindset of foreign buyers are - Exclusive: Chinese buyer interest in Metro Vancouver real estate soars again

Highlights:






So, from the looks of it, the current interest is in the condo area given the average price.
If the real estate market is hurting the way it is, can we really believe this article from Vancouver is Awesome? I can't help but think that there are people behind the article who are trying to resurrect some FOMO or hysteria in the market by locals. Perhaps it is just a lack of trust after repeated bad behaviour and dishonesty by the real estate industry but something tells me that it can't be true. Not anymore, not now.
Deal Guru
Jan 27, 2006
11105 posts
4508 upvotes
Vancouver, BC
choclover wrote:
Oct 24th, 2018 12:16 pm
According to the 2016 Stats Can census data, there were 25k empty homes in the City of Vancouver municipality proper. The City of Vancouver came out with their own report shortly afterwards and said there were only 8.5k homes based on the empty homes tax data. If I had to pick one, I have more faith in Stats Can but

https://www12.statcan.gc.ca/census-rece ... ll&TABID=1

https://globalnews.ca/news/4068194/vanc ... homes-tax/

And that was 2016. I can only assume that the number of empty homes has increased since.
I'm suspecting that the number is much higher than 25K if you take Tony Gioventu, executive director of the Condominium Homeowners Association of B.C., at his estimate that there is a 25 to 30% vacancy rate for many downtown condo towers. After all, the Stats Can numbers are only based on responded Census forms stating that the place is empty (probably a small percentage) and no-responses (ie no-one filed a Census form from that address). Stats Can numbers won't and can't have those Census forms which were returned but were filled in 'inaccurately' by stating that someone lived there when no-one really does (ie yes, there's an owner and receives mail at the address but no-one is actually there at that address).
Deal Guru
Jan 27, 2006
11105 posts
4508 upvotes
Vancouver, BC
choclover wrote:
Oct 24th, 2018 12:19 pm
If the real estate market is hurting the way it is, can we really believe this article from Vancouver is Awesome? I can't help but think that there are people behind the article who are trying to resurrect some FOMO or hysteria in the market by locals. Perhaps it is just a lack of trust after repeated bad behaviour and dishonesty by the real estate industry but something tells me that it can't be true. Not anymore, not now.
Yes, it's possible but you have to remember a few things:

1. By focusing at the lower price points, condos is the 'in' thing in comparison to single detached houses in the past.
2. Condos still have the possibility of pre-sales so taxes aren't applied. We don't know how many 'suckers' there are in the PRC when it comes to pre-sales and thinking that the market is great.
3. Inquiries is different than actual purchases.

One bit that I didn't highlight which maybe I should have is the following:
Metro Vancouver has this year slipped to being the fifth most searched-for city for Chinese buyers, after Greater Toronto, Montréal, Calgary and Ottawa – whereas in 2016 it was second only to Toronto, reported the website.
Since we are seeing activity in Montreal and some in Toronto, it's not far off to say that a lot of the activity has settled in those two areas over Vancouver. It would be interesting to see if Ottawa picks up in the next few months.

NOTE> In the past, other posters have commented on the fact that Vancouver and Toronto have large Chinese communities so they are 'natural' locations for Chinese immigrants to settle. While that's true, I've always argued that settling in another country is not the #1 reason for their purchases... I've stated that it was for the flip and that increasing property values is the true reason. If you look at the inquiries and well as the markets, places Calgary, Montreal, and Ottawa aren't really known for their large Chinese communities but action is happening there which leads me to believe that my theory is correct, these purchases are solely for investment in order to make a quick buck or two.

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