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blah_blah posted:Realtor fees were about 12k on my recently sold condo in BC (7% on first 100k, 2% thereafter -- and that was after negotiating). My realtor was awesome and super professional and got me more than I had hoped for in way less time than I had expected, but that plus closing costs basically wiped out the small amount of appreciation my place had accumulated over 3 years. Do never buy, etc. If the transaction costs wiped out your capital gains, it presumably follows that the ownership was a net-negative financial decision, as you would have paid more in ownership costs than the equivalent rent for the place. I don't think the average Canadian comprehends that such an outcome is possible (and it is in fact commonplace, I would wager, with condos at least). It seems to be a thoroughly ingrained axiom that you simply can't lose by owning versus renting.
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Jan 10, 2014 00:29
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No amount of actually showing people the numbers can ever make that loving sink in. With a house, every penny you spend is being invested in your house, and that value only goes up. When you sell you get all this money back plus more! Renting is just throwing your money away.
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Jan 10, 2014 00:32
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Even your mortgage interest payments go back into the home's value! Like magic!
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Jan 10, 2014 01:39
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The sad thing will be if they're all eventually correct in a roundabout way if things go south harshly enough that homeowners need bailouts which of course means that anyone who doesn't own will be helping to bail out those who do. I'm not exactly laughing here in my rental apartment thinking about a possible crash.
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Jan 10, 2014 03:35
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I honestly sometimes think that I ought to get myself a house while the rules are still set up so that everyone but homeowners and bankers are left holding the bag when things go south.
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Jan 10, 2014 03:41
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I mean, with the way things are now the government doesn't need to do much to go 'WELP TIME FOR DEBT FORGIVENESS AND BAILOUTS' and just gently caress over the country's coffers.
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Jan 10, 2014 03:42
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EvilJoven posted:I mean, with the way things are now the government doesn't need to do much to go 'WELP TIME FOR DEBT FORGIVENESS AND BAILOUTS' and just gently caress over the country's coffers. This is a pretty real possibility. And I'm emigrating if it happens.
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Jan 10, 2014 04:14
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Don't worry about bailing out home buyers or anything silly like that. We'll all be bailing out banks while people are evicted out of homes that are now worthless. C.f. the US crash and also every other housing crash around Europe.
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Jan 10, 2014 04:27
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I actually think the banks will wear this one to a large extent. The Harper folks have no specific relationship with, or support from, the Bay Street folks. They've signalled quite strongly that if things go kablooie, they won't hesitate to throw the banks under the bus (probably via denying CMHC claims) if it absolves them of responsibility and therefore political damage.
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Jan 10, 2014 04:38
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I find it hard to believe banks would have played as fast and loose with handing out all these mortgages if they weren't reasonably sure the CMHC would work as advertised, bubble or not. I'm sure it will behoove the CMHC to go through all those applications with a fine tooth comb, but people got pumped full of mortgage debt not because banks are cutting corners but because the CMHC itself relaxed the gently caress out of its qualification requirements. Everyone played by the rules as far as we can tell, the rules themselves were the problem.
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Jan 10, 2014 04:51
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Franks Happy Place posted:I actually think the banks will wear this one to a large extent. The Harper folks have no specific relationship with, or support from, the Bay Street folks. They've signalled quite strongly that if things go kablooie, they won't hesitate to throw the banks under the bus (probably via denying CMHC claims) if it absolves them of responsibility and therefore political damage. This is the part of the conversation where someone says, "care to put your money where your mouth is?" and you can reply that we all have already.
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Jan 10, 2014 04:55
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Mr. Wynand posted:I find it hard to believe banks would have played as fast and loose with handing out all these mortgages if they weren't reasonably sure the CMHC would work as advertised, bubble or not. I'm sure it will behoove the CMHC to go through all those applications with a fine tooth comb, but people got pumped full of mortgage debt not because banks are cutting corners but because the CMHC itself relaxed the gently caress out of its qualification requirements. Everyone played by the rules as far as we can tell, the rules themselves were the problem. CMHC is a Crown corporation, and changing the scrutiny level given to claims is a simple handwave for the governing cabinet. 
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Jan 10, 2014 05:05
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Scrutiny level yes, but if the CMHC conditions were 10% down min, 35 year term max or whatever insanity they set when this whole mess started they can't very well retroactively change their mind and say "oh actually that was very unreasonable of us, our bad - so anyway, we won't be covering any of those glhf". I mean technically they could, being the government and all, but it would be A Very Big Deal and is basically a crazy scenario. Banks would be stupid to be cutting corners with that gift of a terms restriction. They might be able to wave away a few careless fuckups but nothing major.
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Jan 10, 2014 05:15
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Mr. Wynand posted:Banks would be stupid to be cutting corners with that gift of a terms restriction. And yet they did. Improper paperwork, improper income documentation, lack of due diligence in doing assessments, the list goes on and on. Seriously, do you think our banks magically somehow didn't do all the paperwork-losing and blind-eye-turning that banks everywhere else in the world did? CMHC (or rather whatever team the Ministry of Finance parachutes in to 'clean up') at very worst can just do what any insurance company does, and find some tiny niggling violation in as many claims as they feel like. The fact that the banks will have shown enough horrible judgment for some bad apple examples to get leaked to the media will all but ensure the public votes to see bank shareholders get hosed and the taxpayer spared as much as possible. Edit: I think the thing to remember here is that, unlike most other Western countries, our political class (especially right now) aren't nearly as beholden to, or tight with, the financial class. We aren't England with our City Boys having gone to the same prep schools and donating tons of cash, likewise for the Wall Street death grip on both the Democratic and Republican parties. Corporate donations in Canada are a minuscule percentage of party revenues, and Canadian political parties love to take turns taking a hot stinky poo poo right on their chest as often as populist expediency requires. Pretty much any time the Canadian Federation of Independent Business tells the Conservatives or Liberals they dislike a given bank policy for economic reasons, that policy gets scuttled. See: bank mergers (Liberals), credit and debit card fee increases (both Liberals and Conservatives), the list goes on and on. If (and I never said this like I'm 100% sure or anything, I'm just saying this is my gut instinct) the Conservatives believe they can get out of this impending mess by sticking it to the banks as much as they possibly can, there is basically no downside to it for them from a political standpoint. Paul Martin picked CFIB and its 100,000 small business owning cranks over the four biggest banks in Canada merging, and somehow I doubt Harper will deviate from that playbook. Franks Happy Place fucked around with this message at 05:39 on Jan 10, 2014 |
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Jan 10, 2014 05:30
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I'm looking to find a new place to rent in the East Van/Commercial Dr area in September (where I currently live, renting a place from a friend, but looking for a new place when the girlfriend moves to Van). Any good Vancouver Rental guides or websites good to the area that I should look into for info on what Property managers to avoid or what red flags to look out for?
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Jan 10, 2014 07:42
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Whatever you do, don't go with The Rental Guide (rentalguide.ca). They are a huge scam with tons of complaints against them. Unfortunately, they also spam up Craigslist and other classifieds with fake ads they use to harvest your contact details, so be wary. I think as mentioned in previous posts in this thread, you're pretty well protected by BC rental laws. Just make sure you ask the right questions and look for the right things when viewing the place, and don't feel obliged to take the first place you get a viewing. Some red flags would be lack of extractor fans in the bathroom or kitchen, especially in a basement suite. Also any obvious signs of damp. You should look at whether heating is included, and if not the type of heating and how well insulated the place is, and factor that into the rental cost. You can ask for estimates on heating bills. Oh, this site is pretty good. It's run by the government as a general (and legal) resource: http://www.tenants.bc.ca/main/ This is another: http://www.rto.gov.bc.ca/content/rightsresponsibilities/default.aspx You should definitely at least skim through the legal stuff. There's also the gooncave thread in A/T about house hunting more generally. I think now is a good time to be looking in terms of getting cheaper rents, since demand is lower. It's a lovely time to be moving in Vancouver weather, though.
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Jan 10, 2014 07:58
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Lexicon posted:If the transaction costs wiped out your capital gains, it presumably follows that the ownership was a net-negative financial decision, as you would have paid more in ownership costs than the equivalent rent for the place. Yes, it was a probably a net-negative if you consider the opportunity cost of all the money I used paying off my mortgage versus the returns I would have had in a balanced portfolio. That being said, with interest rates at historic lows, a large down payment, and paying down my mortgage aggressively, I think I only paid around 20-25k in interest+mortgage termination penalties in just under 4 years (plus another $250/mo for strata+property taxes), so that's certainly much less than rent would have been (my place probably would have rented for $1400-1500/mo). Realistically, I probably came out 'ahead' given that my four-year-younger-self definitely wouldnt've put all his spare money into investments. But a lot of things went my way and I still only approximately broke even -- the math is clearly against buying in Vancouver and I just got pretty lucky. The 'axiom' you mention is just bizarre, I bought my condo in my early 20s and I would be congratulated by every one of my parents' friends on being smart with my money when in reality almost all of my net worth was tied up in a single illiquid asset (and leveraged, at that). Now I rent (although living in SF makes that choice particularly easy) and am almost completely liquid and have much more financial peace of mind (especially now that I've gotten rid of most of my CAD as well). I still want to come back to Vancouver and own a (much more reasonably priced) house one day -- I just hope that the bubble bursting doesn't destroy the things I like about Vancouver/Canada in the process.
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Jan 10, 2014 08:03
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Vancouverites, anyone notice vision critical had been replaced with Microsoft?
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Jan 10, 2014 14:57
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After the bubble bursts Canada will still have trees and bears and poo poo, so I wouldn't worry about that.
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Jan 10, 2014 15:13
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In talking with other people about housing prices, would it be at all accurate to use the analogy of an auction house where everyone is given double the amount of money they walked in with? The same number of items would be on sale (representing more or less static supply of housing) but since everyone has more money to play with everyone's going to end up paying more even though the items themselves haven't changed. I come across people who don't seem to get that housing prices didn't use to rise like this and that Toronto (or wherever you may be) hasn't become so much more desirable that it would justify the crazy listing prices.
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Jan 10, 2014 15:25
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It's more like everyone has the same amount of money, but the number of houses in the auction block has doubled - but the auctioneer is insisting that the starting bids are double instead of half. That's the logical disconnect between rational economics and bubble economics; the only reason the supply glut is being filled temporarily is by slipshod mortgages, fudged numbers, and, increasingly, nothing at all. That's why there's a bubble.
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Jan 10, 2014 15:30
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So Canada lost 46,000 jobs in December. But everything is fine and housing prices won't go down because it's different here.™
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Jan 10, 2014 17:30
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Maybe if you idiots stopped blocking pipelines and poo poo we could get some real fuckin' job growth (in the oil clean up sector)
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Jan 10, 2014 17:30
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Granted, one cost of owning is simply being tied down to one location which has an impact on job and career opportunities and/or simple mental well being. Anyway, the Canadian real estate market is interesting because it is such an obvious bubble. I mean there is obvious the issue of China, not only of potential property investors but also the fact that the Chinese economy keeps demand (and thus speculation on) raw materials. If the banking system and local government debt blows up in the PRC, it is going to effect Hong Kong and it will probably effect Canada and especially Vancouver/BC. In addition, if the commodities market also collapses at the same time, it will be even more serious. In addition, there is the danger this will cause a slowdown in the US, sapping Canada of more potential exports and Europe, especially if it pushes another sovereign debt crisis (which honestly didn't really go away). It seems like quite a tightrope walking act, especially since unemployment is rising and things really haven't even kicked off yet. Ardennes fucked around with this message at 18:11 on Jan 10, 2014 |
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Jan 10, 2014 17:31
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Franks Happy Place posted:And yet they did. Improper paperwork, improper income documentation, lack of due diligence in doing assessments, the list goes on and on. Seriously, do you think our banks magically somehow didn't do all the paperwork-losing and blind-eye-turning that banks everywhere else in the world did? This is for sure true. Many people have dealt with a mortgage broker, and while he was doing the paper work he frowned before saying, "It's fine, I will sort that out." Well chances are you were just inadvertly a party to a "victimless" fraud. I am fairly certain my original mortgage app has some paperwork problems, though I have no idea what they actually are as the broker dealt with it. This was before the current bubble, so I have to imagine that in a world with million dollar mortgages this has become an art form by the mortgage origination business.
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Jan 10, 2014 17:36
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tagesschau posted:So Canada lost 46,000 jobs in December. But everything is fine and housing prices won't go down because it's different here.™ And CAD is down almost 10% in a month. And there's a lot of weird behaviour in the bond market (beyond my comprehension really, but people on twitter like @BenRabidoux seem quite surprised). I can't shake the feeling that winter is coming.
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Jan 10, 2014 17:52
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Lobok posted:In talking with other people about housing prices, would it be at all accurate to use the analogy of an auction house where everyone is given double the amount of money they walked in with? The same number of items would be on sale (representing more or less static supply of housing) but since everyone has more money to play with everyone's going to end up paying more even though the items themselves haven't changed. I come across people who don't seem to get that housing prices didn't use to rise like this and that Toronto (or wherever you may be) hasn't become so much more desirable that it would justify the crazy listing prices. Yes, this is the good analogy to use. The other good analogy is to counter the 'argument' of "Well, people have been saying it's a bubble for years!" You then point out that if you had a morbidly obese friend whose medical data showed horrible cholesterol, blood pressure, etc, and everyone expected him to have a massive coronary any day now, that if this guy somehow kept chugging along eating ten cheeseburgers a day, nobody would somehow assume that he would live to be 90... the piper will get paid sooner or later.
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Jan 10, 2014 20:15
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Uh no look at Samo Hung he's fat but a martial arts master. It's all about the chinese bro.
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Jan 10, 2014 20:18
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Franks Happy Place posted:Yes, this is the good analogy to use. And we all choose to listen to the experts who say nothing's wrong... even though they have a vested interest in selling him more cheeseburgers.
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Jan 10, 2014 20:20
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The most important thing when arguing this stuff is to recognize that a lot of people you are talking to are hearing you tell them that they made a horrific financial decision out of ignorance and hubris, based on a huge amount of cultural pressure and nudging from their families and friends, and that there's little to nothing they can do about it. So if they seem to get backed up about it, just drop it- there's just no point to arguing it with them. Save your real arguing for people who are about to buy their first place or are considering selling their current one. That way you're working with the grain.
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Jan 10, 2014 20:24
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Franks Happy Place posted:The most important thing when arguing this stuff is to recognize that a lot of people you are talking to are hearing you tell them that they made a horrific financial decision out of ignorance and hubris, based on a huge amount of cultural pressure and nudging from their families and friends, and that there's little to nothing they can do about it. So if they seem to get backed up about it, just drop it- there's just no point to arguing it with them. I may be one of those people, but I've been reassured a few times in this thread and from talking to people that the east coast is fine - that it's not overvalued. I bought a townhouse in the summer on Peninsular Halifax, and I've been informed Peninsular Halifax in particular is immune. Is this still the consensus? I feel as though the longer this goes on, the harder the crash. And the fewer that will be spared from its wrath.
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Jan 10, 2014 21:04
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The east coast is disgustingly overvalued given the state of its economy, possibly even more so than BC in the real areas.
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Jan 10, 2014 21:15
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Rick Rickshaw posted:I've been informed Peninsular Halifax in particular is immune. It's the height of naïveté to think this. Even Manhattan had a huge surplus of office space, for example, for a while after the GFC (so much so that they had to halt construction on One World Trade Center).
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Jan 10, 2014 21:23
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Rick Rickshaw posted:I may be one of those people, but I've been reassured a few times in this thread and from talking to people that the east coast is fine - that it's not overvalued. I bought a townhouse in the summer on Peninsular Halifax, and I've been informed Peninsular Halifax in particular is immune. Is this still the consensus? 
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Jan 10, 2014 21:34
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Cultural Imperial posted:Vancouverites, anyone notice vision critical had been replaced with Microsoft? They've been in the building for years (I worked there), but recently took over the top two floors.
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Jan 10, 2014 21:36
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That website is completely zonked at the moment. too bad as I was curious about it's findings and analysies.
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Jan 10, 2014 21:42
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They ain't makin' any more peninsula!
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Jan 10, 2014 23:59
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Rick Rickshaw posted:I may be one of those people, but I've been reassured a few times in this thread and from talking to people that the east coast is fine - that it's not overvalued. I bought a townhouse in the summer on Peninsular Halifax, and I've been informed Peninsular Halifax in particular is immune. Is this still the consensus? Even in Charlottetown where I am (was?) planning on buying in the next 6 to 12 months seems quite overvalued, despite being... well PEI. It's at least $300k for a new ~2000sqft rancher on 1/2 acre. The signs are all there for a country-wide correction obviously, but the axiom of "you can't time the market" is still true so waiting around for an uncertain amount of time is also somewhat painful. The problem in PEI is that rental units are universally poo poo, or way over-priced if they're new-ish, despite a 10% vacancy rate. Most houses in town are also kind of poo poo too and there's a big gap in the market between $250k and $350k. No loving HST rebate on new construction for first-time buyers either.  I'd like to see if that economicanalyst site has Charlottetown price/rental data, they have a Price/GDP analysis which doesn't look too out of line - would like to see the last 3 years of data though. 
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Jan 11, 2014 00:56
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Are there even enough residences in PEI for this to be a statistically-significant exercise? 
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Jan 11, 2014 01:40
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Yikes. Well, luckily I like it here and I'm hoping to stay in this place for 10 years, so if it all goes south soon, it should recover by then. I've got a roommate helping to pay the mortgage anyway. Maybe another soon. God bless my unambitious pothead friends! 
Rick Rickshaw fucked around with this message at 02:15 on Jan 11, 2014 |
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Jan 11, 2014 02:11
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