Real Estate discussions

[FarmerHaight]

Originally Posted by chowhou

Current 3M CDOR is pricing in a 25 point drop for the December announcement and a 100 point drop between now and the December 2024 announcement.

That's wishful thinking, IMO. Inflation is still not anywhere near the BoC's target.

[Forager]

Originally Posted by chowhou

Current 3M CDOR is pricing in a 25 point drop for the December announcement and a 100 point drop between now and the December 2024 announcement.

There's a lot to factor in that's really out of our control locally. For instance, countries worldwide have racked up their highest levels of debt since WWII with little appetite for balancing budgets. On one hand this increases inflationary pressures and the spectre of higher interest rates on a global level. Meanwhile, we're flirting with a recession on the horizon. It's all a bit confounding even for the economists who, at the best of times, can't agree.

[MIPS]

Originally Posted by whatnext

Could the bubble finally be bursting, a year after the market started to slow?

[Shakes Magic 8-Ball]
"SIGNS POINT TO NO"

I still put my money on we'll see a VERY sharp fall and no gradual drop of a petty 20 or 30% compared to a previous year or even quarter.
I also suspect it will be associated with some other major event.

[WarrenC12]

Originally Posted by Forager

There's a lot to factor in that's really out of our control locally. For instance, countries worldwide have racked up their highest levels of debt since WWII with little appetite for balancing budgets. On one hand this increases inflationary pressures and the spectre of higher interest rates on a global level. Meanwhile, we're flirting with a recession on the horizon. It's all a bit confounding even for the economists who, at the best of times, can't agree.

Canada is already in a technical recession, albeit barely. On a per capita GDP measure we're well into it.

[chowhou]

Originally Posted by FarmerHaight

That's wishful thinking, IMO. Inflation is still not anywhere near the BoC's target.

It might be wishful thinking, but it's the market consensus right now too. Just like electoral polling data, anything can change but corporations aren't in the business of wishful thinking.

[Forager]

There are so many global balls in there air right now that can have real impacts here locally.
- worldwide economic slowdown
- the rise in global tensions both economically and politically
- the implosion of China's real estate sector and the massive debt held Chinese RE firms. Will they be able to successfully restructure?
- another pandemic or emergence of a highly virulent form of COVID 19

Additionally, future policy here in Canada could have major impacts:
- Canada's immigration policy and policies surrounding property purchasing (e.g. removal of moratorium on Foreign Buyers, AirBnB, rentals, etc.).
- CoV's move towards higher density neighbourhoods and streamlining of zoning and the development process
- rising labour and materials costs
- changes to how capital gains is calculated on investment properties or, applying capital gains to primary properties. This wouldn't go over well, but if Alberta opted out of the CPP, I wouldn't be surprised if this was at least floated.

There's no crystal ball and you can only make the best-informed decisions at the time, so as much as we can analyze and over analyze, one might be best to flip a coin!

[whatnext]

I'm not quite sure where this fits, so I'll put it here. This article confuses me a bit. If it's leasehold don't the strata owners own the building even if they don't own the land? Yet it refers to them getting an assessment from a private owner?

'Panic and desperation': Leaseholders in Vancouver building rocked by sudden tripling of monthly fees
The leaseholders, who are mostly fixed-income seniors, have been hit hard by the sudden notice of major maintenance costs and the short amount of time in which they had to come up with the money
Author of the article: Joanne Lee-Young
Published Mar 06, 2024

...About six weeks ago, the private owner of El Cid tower, a 193-unit, 27 storey tower on Comox Street that was built in 1968, issued to leaseholders a notice of a special assessment of $25,000 for each unit, due in monthly payments at the beginning of March.

The residents, who have been paying operating fees of about $800 a month, had to submit 12 post-dated cheques for another $2,200 a month and were told there will be several more large assessments like this in the next three years.

The situation has them joining other low- or fixed-income leaseholders at other buildings who are also facing hikes in fees and pressing to fill what they say is a gap in oversight.

Owners of these leaseholds basically paid a lump sum to an owner or landlord that is a multi-year, pre paid form of rent that allows them to live in the unit for the duration of the lease, which is usually a term of up to 99 years....

https://vancouversun.com/news/local-...f-monthly-fees


You can find the For Sale listings on rew:
https://www.rew.ca/properties/537202...erty_click=map

[idunno]

The leaseholders only own the lease. There is no strata, there are no strata fees, there are no individual property taxes.

This kind of special levy decided by the owner is common - there are other buildings in the West End that have had this occur in recent years. The obvious difference is that there is no vote as to how much/when the payments will occur - that is solely decieded on by the building owner. If people can't afford it, they sell, and the world carries on. That part isn't wildly different than a strata levy scenario.

[madog222]

Most of the leasehold contracts started in 1974 and came into being after fair rent controls were legislated. A small group of rental apartment owners balked and instead sold their apartments as 99-year lease units in order to sidestep rent controls.

Unlike strata property owners and other long-term renters, the private contracts or leases that govern these leasehold arrangements don’t fall under any legislation or any provisions of the Residential Tenancy Act.

Overall, it’s a relatively small number. According to the province, there are only about 20 buildings with such leasehold arrangements and they shouldn’t be confused with other leasehold arrangements where strata owners and the strata own the building, but not the underlying land on which it’s built.

From Vancouver Sun https://vancouversun.com/news/local-...f-monthly-fees


Interesting, first time I've heard of this arrangement. Seems like a win win scenario for the owner, their children, and childrens' children.

Originally Posted by idunno

there are no strata fees

No fees to a strata but there are still monthly maintenance fees which effectively includes the property tax baked in, listings for this building have current fees at around $1.30/sqft.

It sounds like they are raising around $15-20 million in total with these assessments.

[ssiguy]

Hardly surprising, this is just another renoviction scheme.

They know these people will have no options but to pay for these "assessments" because the units are impossible to sell. They don't qualify for any CMHC financing, banks won't approve a loan for them without at LEAST 50% down, "investors" won't touch them, and even if they can sell them for pennies on the dollar the owners know that they will have no where to move to.

This is what happens when you consider your city to be nothing more than a commodity to sell............when you commodify a city, you commodify the people who live in it.

[Changing City]

Originally Posted by ssiguy

Hardly surprising, this is just another renoviction scheme.

They know these people will have no options but to pay for these "assessments" because the units are impossible to sell. They don't qualify for any CMHC financing, banks won't approve a loan for them without at LEAST 50% down, "investors" won't touch them, and even if they can sell them for pennies on the dollar the owners know that they will have no where to move to.

This is what happens when you consider your city to be nothing more than a commodity to sell............when you commodify a city, you commodify the people who live in it.

It sounds like the commodification took place at least 50 years ago.

[whatnext]

Originally Posted by madog222

From Vancouver Sun https://vancouversun.com/news/local-...f-monthly-fees

Interesting, first time I've heard of this arrangement. Seems like a win win scenario for the owner, their children, and childrens' children.

No fees to a strata but there are still monthly maintenance fees which effectively includes the property tax baked in, listings for this building have current fees at around $1.30/sqft.

It sounds like they are raising around $15-20 million in total with these assessments.

It's a bizarre arrangement. I'd heard of leaseholds from the city like False Creek but I didn't know there were up to 20 buildings that had private owners! I wonder what they are?

El Cid has not just the existing tower but a pretty big parking structure attached to the side which where you could likely build another tower.

[IMG]elcid by bcborn, on Flickr[/IMG]

[whatnext]

I was thinking about this, does anyone know if 1251 Cardero is the same leasehold arrangement? Same era, style of building:

https://www.rew.ca/buildings/8810/su...t-vancouver-bc

[idunno]

Correct.

A few others:

1250 Burnaby
1534 Harwood
1100 Harwood
1330 Harwood
1219 Harwood

They're pretty common, especially south of Davie St!

[whatnext]

Originally Posted by idunno

Correct.

A few others:

1250 Burnaby
1534 Harwood
1100 Harwood
1330 Harwood
1219 Harwood

They're pretty common, especially south of Davie St!

Interesting. I wonder if any of them share the same owner?