Real Estate

Vancouver housing bubble?

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  • May 26th, 2019 4:02 am
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Deal Guru
Jan 27, 2006
10517 posts
4155 upvotes
Vancouver, BC
Mahetha wrote:
Mar 8th, 2019 2:32 pm
why do immigrants want to go there? except the rich ones, inflated rent and home prices, higher gas price, MSP premium, HST, land transfer tax, lower minimum wage and not to mention crime level and druggies on the streets ( compare Alberta only minus is the weather ). Not worth the weather. Immigrants come here to make money and have better life not to enjoy the weather.
It's not necessarily the weather... it's a place they know.

If you think about any country in the world (not just Canada), there are only a few cities in each of those countries that are known across the world - ie France -> Paris, UK -> London, Liverpool, the US -> NYC, San Francisco, LA... And in each of those centres, there's probably the largest immigrant population as a percentage of the whole than anywhere else in the country. Also, new immigrants to a different culture will tend to move to areas where a similar culture/language exist as they have a higher level of comfort - ie speaks a similar language, can find similar food,...
Member
Jul 10, 2018
451 posts
402 upvotes
craftsman wrote:
Mar 8th, 2019 1:21 pm
Banks aren't stupid when it comes to debt or the possibility of default. They know that clients can't easily move from one institution to another now with the stress test especially if they are underwater in their mortgage so the bank may not be as willing to give the best deal on renewal - after all, where can the homeowner go as who is going to give them a mortgage for more than the home is worth?
They may not get any deals but there won't be any big surprises either. The banks have no interest in having clients lose their homes. They want people to stay in their homes and pay their mortgages so that they can continue profiting off the interest payments.
[OP]
Deal Addict
User avatar
Dec 3, 2004
4979 posts
3232 upvotes
Vancouver
Motoss wrote:
Mar 6th, 2019 10:19 am
“The only reason Vancouver took off is because of Chinese money and speculation,” Mr. Watt says.

“Ms. Yang says many of her clients are investors from China and it’s become difficult to transfer money into Canada because of new Chinese controls on the flight of capital. As well, the province’s new 20-per-cent foreign-buyers tax, among other new taxes, is putting them off.

“If we talk about the luxury market, which I am frequently in, I find most of my buyers are immigrants from China. And right now it is very hard for them to wire the money to Canada, according to my clients, and I’ve heard that from other realtor friends, too. That’s the No. 1 reason.”

“I have one of my clients, her house is over $4-million, and the tenant that won’t bring her trouble is paying $1,000 for rent, in the Point Grey area.”

https://www.theglobeandmail.com/real-es ... vancouver/
Huh? Tenant who won't bring her trouble? In other words, a tenant who lets the landlord violate their rights?

I've contacted a few of these "luxury homes" that have come on the market recently, and I have had some laughable responses. It seems like most of these "landlords" want to rent to avoid the empty home tax, but don't actually want to rent their house out... if that makes sense. They all seem to be looking for the ideal renter, e.g., a single professional Physician who only visits the house 2 weeks a month and will abide by the "if it's yellow, let it mellow" policy so that the toilets won't "wear out". Oh and the landlord wants to keep full access to the property to do anytime inspections. They also want access to use the pool whenever they want and they want to keep their car in the garage.

Sort of not joking. Kind of funny to see $8 million dollar homes on the market for $4,500 a month and yet they can't find renters who meet their strict qualifications.
Deal Guru
Jan 27, 2006
10517 posts
4155 upvotes
Vancouver, BC
TheSinner wrote:
Mar 8th, 2019 3:56 pm
They may not get any deals but there won't be any big surprises either. The banks have no interest in having clients lose their homes. They want people to stay in their homes and pay their mortgages so that they can continue profiting off the interest payments.
No deals will typically mean higher payments... Remember that during the housing mania, banks competed hard for customers in order to drive up their numbers so they drove down the cost to the customer. Now, with fewer good customers to compete for (good meaning customers that can actually move from another bank and qualify for a mortgage with them due to the new stress test), the banks will still need to make the bottom line and typically that will mean increased borrowing cost to the customers.
Deal Guru
Jan 27, 2006
10517 posts
4155 upvotes
Vancouver, BC
adamtheman wrote:
Mar 8th, 2019 4:07 pm
Huh? Tenant who won't bring her trouble? In other words, a tenant who lets the landlord violate their rights?

I've contacted a few of these "luxury homes" that have come on the market recently, and I have had some laughable responses. It seems like most of these "landlords" want to rent to avoid the empty home tax, but don't actually want to rent their house out... if that makes sense. They all seem to be looking for the ideal renter, e.g., a single professional Physician who only visits the house 2 weeks a month and will abide by the "if it's yellow, let it mellow" policy so that the toilets won't "wear out". Oh and the landlord wants to keep full access to the property to do anytime inspections. They also want access to use the pool whenever they want and they want to keep their car in the garage.

Sort of not joking. Kind of funny to see $8 million dollar homes on the market for $4,500 a month and yet they can't find renters who meet their strict qualifications.
Not surprising if you think about it. Many of them want to keep their new house new!
Member
Jul 10, 2018
451 posts
402 upvotes
Motoss wrote:
Mar 6th, 2019 10:19 am
“The only reason Vancouver took off is because of Chinese money and speculation,” Mr. Watt says.

“Ms. Yang says many of her clients are investors from China and it’s become difficult to transfer money into Canada because of new Chinese controls on the flight of capital. As well, the province’s new 20-per-cent foreign-buyers tax, among other new taxes, is putting them off.

“If we talk about the luxury market, which I am frequently in, I find most of my buyers are immigrants from China. And right now it is very hard for them to wire the money to Canada, according to my clients, and I’ve heard that from other realtor friends, too. That’s the No. 1 reason.”

“I have one of my clients, her house is over $4-million, and the tenant that won’t bring her trouble is paying $1,000 for rent, in the Point Grey area.”

https://www.theglobeandmail.com/real-es ... vancouver/
$1k/month to live in a $4 million home. How common is this? I wouldn't mind spending a year in VanCity to get a feel for that city.

I'll even sacrifice and pay $2k/month to live in an $8 million home.

Any agents here can direct me to properties like this?
Deal Guru
Jan 27, 2006
10517 posts
4155 upvotes
Vancouver, BC
TheSinner wrote:
Mar 8th, 2019 4:23 pm
$1k/month to live in a $4 million home. How common is this? I wouldn't mind spending a year in VanCity to get a feel for that city.

I'll even sacrifice and pay $2k/month to live in an $8 million home.

Any agents here can direct me to properties like this?
Look on Craigslist.
Deal Addict
Oct 7, 2007
4561 posts
1468 upvotes
Something about this story doesn't seem entirely accurate, complete, or believable. I think it is more likely an infomercial for brokers looking to hook up prospective tenants with mansion owners who don't want to pay the empty homes tax. BUT if you know anything about these property owners, it is HIGHLY UNLIKELY that they are going to be okay with a bunch of students renting out their places. Especially when so many of these places are brand new and have never been lived by the owner. Think about it....if it were your brand new place, would you feel okay about renting it to a bunch of students???
Newbie
Oct 16, 2018
5 posts
5 upvotes
My Chinese landlord rented out his newly bought 5.5 M new house to bunch of students.
Loud parties

He will demolish the house and turn it into townhouses project

so he doesnt care
Deal Guru
Jan 27, 2006
10517 posts
4155 upvotes
Vancouver, BC
choclover wrote:
Mar 10th, 2019 7:54 pm
Something about this story doesn't seem entirely accurate, complete, or believable. I think it is more likely an infomercial for brokers looking to hook up prospective tenants with mansion owners who don't want to pay the empty homes tax. BUT if you know anything about these property owners, it is HIGHLY UNLIKELY that they are going to be okay with a bunch of students renting out their places. Especially when so many of these places are brand new and have never been lived by the owner. Think about it....if it were your brand new place, would you feel okay about renting it to a bunch of students???
I think it depends on the owner... some of them bought the property to maybe live in a few years down the road while others see it as a play on the land. The ones that see it as a play on the land will probably rent it out to anyone as they don't really care about the property itself as the land is the vast majority of the property's 'value'.

Also, many of these people who are renting it out may not have heard the various horror stories of AirBnB party rentals so they really don't understand what can actually happen and how ugly it can get.
Deal Expert
User avatar
Feb 9, 2003
17604 posts
2314 upvotes
Langley
Yeah....some of these "mansions" are probably 30+ years old and fairly run down. The owners probably aren't concerned much with the structure since any self-respecting multimillionaire would a new custom-built house.
Deal Guru
Jan 27, 2006
10517 posts
4155 upvotes
Vancouver, BC
Here's a great example of 'WTF are they talking about?" - Montreal Is Canada's Last Major Housing Market Seeing Price Growth. The title of the Huffington Post article doesn't express the true nature of what's in the article in terms of the Vancouver market.

Here are some highlights -

Image
The graph about is for the last 6 months - note that the drop recorded was about 0.7% for Vancouver.
In Vancouver, "seasonally adjusted home sales stabilized in the beginning of the year, limiting the potential of further home price declines," Pinsonneault added.

Still, the historic weakness in Vancouver's home sales, coupled with rapidly rising sales in Montreal over the past few years, means Montreal has overtaken Vancouver as the country's second-largest housing market.
Image
The dollar value of home sales in Montreal in February was $1.606 billion, up 10 per cent in a year, according to the city's real estate board. Meanwhile, Vancouver's market has shrunk by 40 per cent over the last year, to $1.423 billion in February, according to data released by the British Columbia Real Estate Association (BCREA) on Wednesday.
If house prices were more even across Canadian cities, Montreal — with its metro population of around 4 million — would always have had a larger housing market than Greater Vancouver, with a population of 2.5 million.

But given the much higher real estate prices in Vancouver, this is likely the first time in at least a decade that Montreal's market has been larger than Vancouver's.
Here's the interesting part especially if you compare the first graph showing a drop of 0.7% with the numbers listed below. How far off is the various housing index prices from each other and reality? And if you take them to be accurate, then using the time periods shown, the market dropped like a rock in the first 9 months of last year and then stabilized over the past 6 months resulting a drop of 0.7% over those six months? That doesn't seem to fit with the other data presented in the past that shows that the price drops have gotten bigger not smaller in the past 6 months.
BCREA's data shows the average price of a house sold in Vancouver is back below the $1-million mark.

The average sale price in Greater Vancouver was $945,521 in February, down 11.5 per cent, or nearly $122,000, in a year.

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