Vancouver Real Estate 'Bubble' at 30-year Peak

[misher]

Originally Posted by CivicBlues

No. This is only an Anglo-Nordic norm. Unless you count Italy, Japan, Korea, Spain among others as "developing" countries.

Thanks I forgot Korea and Japan. Even in Britain having your parents look after the children is quite common and you even get a pension boost for it (which is why I said Western Europe) https://www.ageuk.org.uk/latest-news...ponsibilities/

In Germany it’s based on giving kids independence/autonomy (thus less babysitting) probably one reason the age of consent isn14 but given our problems with pedos I don’t believe we could adapt this system to here unless our culture changed https://m.independent.ie/life/family...-36610813.html



In all honesty I think we should be strongly encouraging seniors to stay in the workforce part time either through childcare or positions that don’t require much physical activity such as supervisory positions or security guards (who watch cameras). I believe giving seniors a sense of purpose would help reduce the elderly suicide epidemic https://www.huffpost.com/entry/how-d...0640cd641f/amp

[WarrenC12]

Getting seniors to work more is questionable, but if it gives them a purpose, that's great.

Is there a social safety net that allows seniors to live independently in those asian countries like Korea and Japan?

[misher]

Originally Posted by WarrenC12

Getting seniors to work more is questionable, but if it gives them a purpose, that's great.

Is there a social safety net that allows seniors to live independently in those asian countries like Korea and Japan?

The question is, why would they when they can stay and support their kids and grandkids?

Totally different culture. Most asian parents would be sad if they had to live independently from their family.

[CivicBlues]

Not sure about Japan, but a lot of Korean Seniors' "retirement" plan involves taking their meager pension and buying a shop so they can support themselves. Some are not so lucky:

• Video Link

[WarrenC12]

Originally Posted by misher

The question is, why would they when they can stay and support their kids and grandkids?

Totally different culture. Most asian parents would be sad if they had to live independently from their family.

Some people don't want to live with their kids and/or grown parents. Inlaws are a factor too.

Yes, culture is different. I can't imagine living with 3 generations, especially in an apartment/condo living situation.

[misher]

Originally Posted by CivicBlues

Not sure about Japan, but a lot of Korean Seniors' "retirement" plan involves taking their meager pension and buying a shop so they can support themselves. Some are not so lucky

Its not like Canada's seniors benefits are generous. Your expected to have saved up before you retire or have a cushy job that offers a pension. Thats why we have RRSPS. People are choosing to retire later because they didn't put much aside which is a tradeoff, not a tragedy. Given that around 15.5% of the Federal budget goes to the elderly (not counting health and other benefits) I think we're doing enough.

Originally Posted by WarrenC12

Some people don't want to live with their kids and/or grown parents. Inlaws are a factor too.

Yes, culture is different. I can't imagine living with 3 generations, especially in an apartment/condo living situation.

Yes I understand that. We need to draw traits from other cultures that are useful into our own. Its very common in Western Europe to have generations of family in one house and it used to be common in our culture back when we lived in manors and farmhouses. Honestly we got too rich too fast.

[WarrenC12]

Originally Posted by misher

Its not like Canada's seniors benefits are generous. Your expected to have saved up before you retire or have a cushy job that offers a pension. Thats why we have RRSPS. People are choosing to retire later because they didn't put much aside which is a tradeoff, not a tragedy. Given that around 15.5% of the Federal budget goes to the elderly (not counting health and other benefits) I think we're doing enough.

Yes I understand that. We need to draw traits from other cultures that are useful into our own. Its very common in Western Europe to have generations of family in one house and it used to be common in our culture back when we lived in manors and farmhouses. Honestly we got too rich too fast.

I agree that seniors have it pretty well off. Even those who plan poorly or don't at all have a safety net. They also vote in droves, that's part of the reason they have it so well.

Back to the point though. Cheap childcare leaving more people to work = bigger economy. You can't argue that. You can talk about quality of life, etc. but that's an individual choice.

Having young kids with at least some daycare time helps to socialize them, gets them some exposure to other cultures/people, and of course those colds and sniffles to start building some immunity.

[misher]

Originally Posted by WarrenC12

Having young kids with at least some daycare time helps to socialize them, gets them some exposure to other cultures/people, and of course those colds and sniffles to start building some immunity.

While I don't believe in free childcare I do agree to this.


Rather than cheap childcare I'm down for increased school hours. We need to take a page from other nations. In China, school hours at 7:30am-5pm with a two hour lunch break. Korea has a 16 hour school day (a bit too much), Germany is flexible but can have an 8am-5pm school day. Honestly physical activity is not nearly up to what it should be, we should be having kids do 1-2 hours of workout routines each day at school. Imagine if we just made recess and lunch breaks longer, or perhaps had P.E. classes before and after school? We could also have highschoolers or even university students serve as monitors (aka free labour) to keep employment of teachers down.

I'd also be down for presentations in the gym after school as childcare. We could show educational films or have public speakers. Honestly I'd love if we had a speaker from each job industry come each day to talk to kids. Every job from oil workers, to scientists, to the manager at McD., to accountants, to healthcare workers, etc. You literally only need 1 supervisory adult per 100-150 kids in this situation+1 speaker and you could probably provide around 2 hours of childcare.


Personally my parents could never make it by pickup so I always spent around a hour or two with the other kids playing around school. Schools end way too early to accommodate a working schedule.

[Sheba]

Condo market in Vancouver suburbs still ‘a lot better’ than normal

A tempting bright-red advertisement for a new condo development in a Vancouver suburb circulated online this fall, sparking excitement from first-time homebuyers and concern among long-standing real estate observers.

The developers of The Landing, a 78-unit complex in Langley, were offering to pay the mortgages for a year of the first 20 buyers and give remaining buyers a $10,000 discount.

It looked like a sign of the times: had provincial and federal government measures to cool the market been too successful? Were developers stuck with a glut of inventory as sales and prices dropped off a cliff?

Not really, according to the marketer behind the promotion.

“The way we run our sales programs is we run basically a different promotion almost every week. I’ve been working in suburban markets for a long time and honestly, what I’m seeing right now is it’s not even at a normal market. It’s still a lot better,” said Trevor Street, CEO of the Partners Marketing Group.

“What’s normal for me is having four or five other sites that are active, that are open, that buyers can go to and shop around. I remember a time marketing developments when I ran out of registers to call in our database and started cold-calling rental buildings.”

That was back in 2013 or 2014, he said, before Vancouver’s real estate market exploded and a ripple effect moved through its suburbs and the rest of British Columbia. By 2016, Street definitely didn’t have to run any promotions — he even told developers not to bother building sales centres.

The Fraser Valley, east of Metro Vancouver, has long been considered a more affordable haven for first-time homebuyers.

After prices and sales climbed across the Lower Mainland in 2015 and 2016, the B.C. and federal governments stepped in to attempt to cool the market. In the past nine months, sales have slowed and prices have curbed their meteoric rise. But while the market is softening, it’s not over-correcting, just returning to a more normal state after a wild few years, experts say.

...

The federal mortgage stress test initiated in January appears to be a major factor, he said. The stress test requires mortgage-seekers to prove they would be able to make payments even if interest rates rose substantially, reducing borrowing power by as much as 20 per cent.

“That has to come out somewhere. They’re either buying cheaper homes or they’re not making the offers they would be,” he said.

Provincial government measures, including a 0.5 per cent speculation tax on secondary homes left vacant and a 20 per cent foreign buyers tax, have had a “negligible” effect compared with the stress test, Barbisan said.

But he said he’s “not at all” concerned about the slowdown, noting that he has spoken with mortgage brokers who say relatively similar numbers of people are still coming to get pre-approved. People still want to buy homes, but they may not be finding what they’re looking for or are waiting for prices to decrease further, he said.

...

Steve Saretsky, a Vancouver real estate agent, said the market across the region is going through a downturn but it’s not “major,” and it’s to be expected after the run-ups of the past few years.

“Any time you have that kind of growth, eventually it’s going to swing the other way,” he said. “Has it gone too far? I think a lot of people who are complaining about housing affordability would probably tell you it hasn’t gone far enough.”

Government policies have helped move the pendulum, but it was more or less inevitable, and global housing markets are also slowing down, Saretsky said. People are quick to criticize the stress test and new provincial taxes while forgetting how easy regulators have gone on the housing market for years, he added.

“Everyone in the world talks about how indebted Canadian households are. There’s no question that it’s definitely been a pretty lenient borrowing spree over the last 15, 20 years,” he said. “Now, all of a sudden everybody’s upset because the punch bowl’s been taken away. But parties don’t go on forever.”

He acknowledged that it’s hard on real estate agents because sales volumes are down and they’re making less money.

“But, again, I think we’ve had it pretty good for a number of years.”

[Vin]

Originally Posted by MIPS

City has been pretty leniant about RV parking on city streets as long as you keep the place clean and move every few days. I don't consider living just off Terminal Avenue far-flung either and given how many campers are already parked in that area, so do a lot of other people.

For the homeless, anywhere outside the downtown peninsula is considered "far flung", considering the fact that they can't afford to travel on even the public transit system. How to expect they would want to go for their treatments when they need to walk long hours to get there?

You are right that Terminal Avenue is not far-flung, and I never said it is. RVs are just parked there illegally, and the City is tolerating them for now. If more start coming I'm sure the City will start banning them to designated RV parks far away.

[Vin]

Originally Posted by Sheba

Condo market in Vancouver suburbs still ‘a lot better’ than normal

Totally agree with the article. Developers still need to sell and there will always be good deals at the higher density suburbs.

Also, I don't feel sorry for the realtors making less now, as the smart ones should know about the cyclical nature of this business. For the couple of decades when they had the chance to grab a piece of the windfall pie, they should be able to invest to prep for a good retirement. For those coming in late in the game, well, too bad. Like the article said, all parties would come to an end. Perhaps retrain to be an IT professional? Good talents should not be wasted in property-selling.

[misher]

Originally Posted by Vin

Totally agree with the article. Developers still need to sell and there will always be good deals at the higher density suburbs.

Also, I don't feel sorry for the realtors making less now, as the smart ones should know about the cyclical nature of this business. For the couple of decades when they had the chance to grab a piece of the windfall pie, they should be able to invest to prep for a good retirement. For those coming in late in the game, well, too bad. Like the article said, all parties would come to an end. Perhaps retrain to be an IT professional? Good talents should not be wasted in property-selling.

A few pointers, your bit about the business cycle, I totally agree.

But, this isn't the business cycle causing the industry to suffer. This is deliberate government intervention where the government has taken action to kill the real estate economy. Real estate sales would likely be down 10-20% naturally. But there down 40% because the government said we don't care about your jobs. I take offence at that, the government should not deliberately kill an industry. And killing the industry has reaped little to no benefits.

Your bit about realtors being the only ones that suffered, thats not true the real estate industry is huge. Each sale employs multiple different people from the guy who puts the signs in front, the guy who rennovates the unit, the guy who cleans it, the guys who build it, etc. Realtors are a tiny part of the real estate economy. I'd say realtors are less than 3% of it. Just like when you see the ending credits of a movie, the main actors only make up a couple lines of the 5 minutes of credits.

A bit off topic, but the governments "affordability" strategy didn't do nothing to help affordability. It made prices fall slightly, but only because housing is unattractive now. Making people want to own a home less isn't a way to stop a price issue. Imagine if the governments solution to a food crisis was to put taxes on the food so that less people want to buy it.




We've done something very dangerous by taking action to kill an industry, and then watching it without taking action to save it. The real estate industry is the main employer in BC, it provides more GDP and taxes than oil for Alberta. I hope to god politicians get off their asses and save it before the effects of their decisions are felt. Most predictors are saying prices won't go down any further but the thing is, sales need to rise just to keep people employed and taxes flowing.

[Changing City]

Originally Posted by misher

Most predictors are saying prices won't go down any further but the thing is, sales need to rise just to keep people employed and taxes flowing.

Not true. The current predictions aren't based on any analysis, but entirely on the real estate business trying to sound positive to persuade buyers back into the market. Even then they are suggesting either that prices will stay flat, or fall only a bit more. One of the more cautious, and credible local realtors, Steve Saretsky "sees a “full-blown buyer’s market” with prices that will continue to trend lower for detached homes, condos and townhomes alike."

And interest rates are still expected to rise next year - although not as fast as this year.

[GenWhy?]

Land prices in Vancouver are going down. This is good for everyone (except those that bought for really high prices for some dumb silly reason). We can finally start to make some projects work due to lower land prices. Lot assemblies are getting easier.

[fredinno]

Originally Posted by misher

A few pointers, your bit about the business cycle, I totally agree.

But, this isn't the business cycle causing the industry to suffer. This is deliberate government intervention where the government has taken action to kill the real estate economy. Real estate sales would likely be down 10-20% naturally. But there down 40% because the government said we don't care about your jobs. I take offence at that, the government should not deliberately kill an industry. And killing the industry has reaped little to no benefits.

Your bit about realtors being the only ones that suffered, thats not true the real estate industry is huge. Each sale employs multiple different people from the guy who puts the signs in front, the guy who rennovates the unit, the guy who cleans it, the guys who build it, etc. Realtors are a tiny part of the real estate economy. I'd say realtors are less than 3% of it. Just like when you see the ending credits of a movie, the main actors only make up a couple lines of the 5 minutes of credits.

A bit off topic, but the governments "affordability" strategy didn't do nothing to help affordability. It made prices fall slightly, but only because housing is unattractive now. Making people want to own a home less isn't a way to stop a price issue. Imagine if the governments solution to a food crisis was to put taxes on the food so that less people want to buy it.




We've done something very dangerous by taking action to kill an industry, and then watching it without taking action to save it. The real estate industry is the main employer in BC, it provides more GDP and taxes than oil for Alberta. I hope to god politicians get off their asses and save it before the effects of their decisions are felt. Most predictors are saying prices won't go down any further but the thing is, sales need to rise just to keep people employed and taxes flowing.

It's deliberate government intervention that kept the interest rates artificially low for so long, and thus, allowing the bubble to grow to enormous size. Normally, interest rates would rise once loan demand grows, preventing people from getting new loans.

It's pretty much beyond doubt at this point that the RE market in Vancouver is probably a bubble. When you have a bubble, the best thing to do is prevent it from getting too big, preventing investors from making ever-riskier bets; because every bubble pops.

[misher]

Originally Posted by fredinno

It's deliberate government intervention that kept the interest rates artificially low for so long, and thus, allowing the bubble to grow to enormous size. Normally, interest rates would rise once loan demand grows, preventing people from getting new loans.

It's pretty much beyond doubt at this point that the RE market in Vancouver is probably a bubble. When you have a bubble, the best thing to do is prevent it from getting too big, preventing investors from making ever-riskier bets; because every bubble pops.

Not against this, but again, 10-20% not 40%. The Federal government did this by making mortgages harder and raising rates. Province didn't need to step in but it did.

[rofina]

Originally Posted by Changing City

Not true. The current predictions aren't based on any analysis, but entirely on the real estate business trying to sound positive to persuade buyers back into the market. Even then they are suggesting either that prices will stay flat, or fall only a bit more. One of the more cautious, and credible local realtors, Steve Saretsky "sees a “full-blown buyer’s market” with prices that will continue to trend lower for detached homes, condos and townhomes alike."

And interest rates are still expected to rise next year - although not as fast as this year.

Market will be flat, trending down into 2020. No reason for a reversal yet. We also need to work through the deluge of new completions coming down the line over the next 18 months.

[fredinno]

Originally Posted by misher

Not against this, but again, 10-20% not 40%. The Federal government did this by making mortgages harder and raising rates. Province didn't need to step in but it did.

I doubt that. I mean, the province focused on foreign demand as a populist move, which was 3% at the peak, so...

[Changing City]

Originally Posted by misher

Not against this, but again, 10-20% not 40%. The Federal government did this by making mortgages harder and raising rates. Province didn't need to step in but it did.

Splitting hairs here - but the Federal government didn't make mortgages harder, or raise rates. The Office of the Superintendent of Financial Institutions introduced the stress test - to protect financial institutions (banks) from creating risky loans in an overheated market. The OSFI is an independent agency. Similarly the Bank of Canada sets rates - and while it's also a government agency, it is a special type of Crown corporation, owned by the federal government, but with considerable independence to carry out its responsibilities.

[whatnext]

Since the RE thread is still locked I'll put this here. Bubble has definitely popped:

2018’s Metro Vancouver home sales lowest in 18 years
Benchmark price now 2.7 per cent lower than one year ago, as sales in December plummet by almost 50 per cent

A combination of unsustainably high home prices, rising interest rates, increased taxes and the mortgage stress test are being held responsible for slow residential real estate market activity in Metro Vancouver, according to statistics released today.

There were 24,619 home sales across Metro Vancouver in 2018, which is the lowest full-year total since 2000, and 31.6 per cent lower than 2017, the Real Estate Board of Greater Vancouver (REBGV) reported January 3.

This figure is also 25 per cent below the 10-year average annual home sales for the region, and 38.4 per cent below the very busy market of 2016.

Phil Moore, REBGV president, said, “This past year has been a transition period for the Metro Vancouver housing market away from the sellers’ market conditions we experienced in previous years. High home prices, rising interest rates and new mortgage requirements and taxes all contributed to the market conditions we saw in 2018.”

The board also reported on statistics for December alone, in which Metro Vancouver home sales plunged year-over-year by 46.8 per cent to 1,072 units. This is also 36 per cent lower than the 1,608 sales in November 2018 as potential buyers concerned themselves more with festivities than home purchases.

Sellers also responded to both the slowing market and the holiday season by staying on the sidelines. There were just 1,407 homes newly listed for sale on the MLS® in Metro Vancouver in December, which is 25.6 per cent lower than in December 2017 and a 59.3 per cent decrease in the month November 2018.

With absorption rates low, the total number of homes currently listed in Metro Vancouver is 10,275, a 47.7 per cent increase compared with the low inventory of December 2017. However, it’s 16.5 per cent lower than the active listings of November this year.

Combining all property types, the sales-to-active listings ratio for December 2018 is 10.4 per cent. That means is the first time in many years Metro Vancouver has entered buyer’s market territory, although it will need to remain below 12 per cent for a few months before it is officially a buyer’s market. As ever, the market varies by property type, with detached homes in a very firm buyer’s market at just 7.1 per cent, and townhomes and condos still holding onto balanced market conditions – although sliding – at 12 per cent and 14.2 per cent respectively....

https://www.vancourier.com/real-esta...ars-1.23574725