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Rime posted:The economic, social, and in some ways cultural; disintegration of BC is something I find myself spending way too much time dwelling on than is probably healthy. What exactly changed for these places? Serious question.
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Apr 15, 2014 20:48
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As someone's who's never really been outside of Victoria/Vancouver/Nanaimo area of BC I'm also really interested in this and would love a small-town-death effort post. I mean I understand the economic, policy, and planning reasons for why small towns like that die the world over, but I'd love to hear the BC specifics. Generally when a small town dies it's because it's primary industry dies. The mill, the mine, the tourism market. A big city generally has a robust enough economy that a downturn doesn't destroy it, unless you're detroit and have all your eggs in one basket (auto) plus horrific urban planning. Big cities also have more political clout, no one gives a poo poo about some tiny town they've never heard of. Baronjutter fucked around with this message at 21:12 on Apr 15, 2014 |
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Apr 15, 2014 20:58
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Baronjutter posted:Rural living and small towns are inefficient and any good business cuts its failing parts. Why have 10 small offices when you can have 1 big office and save? Gotta run things like a business, it's good for the economy. The resources freed up by no longer having to support failing small towns can be more efficiently used to create new better jobs. All those people could move to Alberta to work the tar sands or Vancouver to work the condo mines. Isn't this basically the past half-century in Newfoundland's outports?
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Apr 15, 2014 21:07
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tagesschau posted:Isn't this basically the past half-century in Newfoundland's outports? This is the last half century period. Urbanization is a huge thing the world over, specially in the developing world. It's going to be mega cities and temporary resource camps, permanent small towns are obsolete in this economy. Small towns/villages used to be needed as we needed a lot more people in the fields farming and those people needed shops and services to support them. We also used to have a lot more local industry, sawmills and the like. With globalization, a single massive mill importing logs the world over is some how more profitable than smaller local mills. Everything is about 'economies of scale' and small towns just don't make the cut. Many small towns are huge drains. They tend to be sprawly with low population densities, low land values, and unemployment, so a small tax base. Often the local tax base can't even pay for the local roads, let alone anything else. The government is happy to cut these places out as they are huge drains and they have no use in the current economy. It's like cutting dead or dying branches off a tree. On a spread sheet it all makes sense, but "the system" doesn't factor in the human cost. The towns are redundant and surplus and so are the humans inside them. The government just waits for the people who can't or won't move to die, and helps them along by cutting funding to "reservation" levels. I mean that's basically it, these small towns and the people in them end up being viewed by government and capital the same way a lot of people look at reservations. So abandon all the small towns, focus the population in a handful of large cities, and leave the vast wilderness to be mined and ruined without anyone to notice or complain. The TFW's working the mines won't complain and they're fine living in barracks style housing, they don't need a small town to support them. Baronjutter fucked around with this message at 21:40 on Apr 15, 2014 |
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Apr 15, 2014 21:27
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Canadian real estate and housing boom may be ending, Scotiabank warns
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Apr 16, 2014 16:36
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Baronjutter posted:The TFW's working the mines won't complain and they're fine living in barracks style housing, they don't need a small town to support them. A lot of blue-collar workers are okay with this. I feel like you're trying to make TFWs into a scapegoat here, but I've seen Canadian workers sign up for jobs where they have to live in camp for certain periods of time, both in the Oilsands and other industries. Some of the people I know who do this still live in small towns, but those small towns aren't anywhere near where they work.
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Apr 16, 2014 16:42
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Scotiabank and others are clearly making these statements for hedging reasons. If they are wrong, no one will bat an eyelid. If [when] it all goes pear-shaped, they can turn around and say "look, we tried to warn you". Personally, I'm less convinced we ever will see an actual 'crash' event. There's too many forces thoroughly aligned against it. It'll be one hell of a test of central bank independence when the day of reckoning comes.
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Apr 16, 2014 16:42
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I love the language in the reports from those with vested interests: once you start noticing "soft," "cooling, " "gradual," "slow," "stable," and their variations, it seems both incredibly deliberate and desperate.
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Apr 16, 2014 16:43
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Lexicon posted:Scotiabank and others are clearly making these statements for hedging reasons. If they are wrong, no one will bat an eyelid. If [when] it all goes pear-shaped, they can turn around and say "look, we tried to warn you". In lieu of a dramatic reduction in housing prices, what do you think is in store for Canada's economy? Is it just going to hum along until natural resource prices go up? And then we can get back to business buying and selling houses to each other.
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Apr 16, 2014 16:48
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Btw, Boc press conference today. Rate still at 1%. Inflation is still low. Poloz says housing market will have a soft landing. https://businessincanada.com/2014/04/16/live-bank-of-canadas-stephen-poloz-and-tiff-macklem-field-questions-from-the-press/
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Apr 16, 2014 16:50
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I don't think he's necessarily incorrect. Some markets will crash, certainly, but others could remain a steady, stagnant hell unless mortgage rates rise and clear out all of the bad "investments."
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Apr 16, 2014 16:52
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Wasting posted:I don't think he's necessarily incorrect. Some markets will crash, certainly, but others could remain a steady, stagnant hell unless mortgage rates rise and clear out all of the bad "investments." I wonder if there's any publically available bank information on the geographical distribution of their mortgages.
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Apr 16, 2014 17:01
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Cultural Imperial posted:In lieu of a dramatic reduction in housing prices, what do you think is in store for Canada's economy? I really don't know. It seems plausible to me that average standards of living simply drop as an outsized portion of the country's wealth pours into housing and debt service, and there's less money for other things. Since so many Canadians are thoroughly invested in the status quo, this might be the equilibrium outcome.
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Apr 16, 2014 17:02
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I think we're going to see almost-crash level prices in the far suburbs, specially condos in the farthest suburbs, of major cities. But the cities them selves won't see huge drops, just stagnation. So for instance that awful cheap 1,200 sqft condo in the rear end end of Langford you paid 400k for is now worth 250k but the house in a core Victoria neighbourhood you paid $750k for is now worth $700k and 5 years from that it's worth $700k + inflation. Basically I think the economy is going to continue to poo poo its self but without the benefit of housing actually becoming much cheaper. Less money, same housing costs. People will be ok with that because housing value is the #1 most important thing in the country. Everything else can go to poo poo but as long as their house doesn't loose too much value it means everything is ok. Pensions are gone, healthcare requires more and more user fees, free education stops at grade 7, and tap water isn't safe to drink anymore, but by god we averted a housing crash and had a soft landing. \/ Yep, really lovely ones too. Just a cheap wood-frame box surrounded by surface parking but with a website with lots of flash animations of trees and massage and "minutes from amenities". They mostly seem to be geared towards ignorant and old out of towners. Marketing can trick a lot of people. The exact same condo, minus a few slightly better "amenities" would sell for 300k elsewhere. It boggles my mind why anyone would buy into the "luxury" end of things out in Langford. The middle-class market seems tapped out but "stupid old rich people" continues to be a driving demographic in Victoria's regional development industry. Baronjutter fucked around with this message at 17:16 on Apr 16, 2014 |
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Apr 16, 2014 17:06
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People pay 400k for condos in Langford? For real?
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Apr 16, 2014 17:12
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Baronjutter posted:Stuff This is more or less my take, barring some kind of crisis ala 2008 that gets people in a panic.
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Apr 16, 2014 17:16
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I'll have you all know Langford is the home of famous Canadian cultural treasures Prevail and Moka Only of Swollen Members. Yet another best place on earth.
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Apr 16, 2014 17:20
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Also I think what a lot of people will call "stagnation" may not actually adjust for inflation and we'll see housing prices eventually end up where they "should" be, but never because the sticker price went down, only because inflation went up. So like that 700k house today is worth 705k in 10 years. To a lot of people that will be seen as "holding steady" and they'll not flip out and continue to support the prudent financial policies of our stable nation and banking systems. So basically if I want to buy something I'll have to wait 10-20 years for the prices to incredibly slowly correct them selves. Then again wages also won't keep up with inflation either so RIP.
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Apr 16, 2014 17:21
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You are the mopiest, most defeatist person I've ever seen in my life. You should go to a doctor and see if you're actually clinically depressed or something because, drat.
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Apr 16, 2014 17:24
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PT6A posted:You are the mopiest, most defeatist person I've ever seen in my life. You should go to a doctor and see if you're actually clinically depressed or something because, drat. Dude that applies to like 100% of people in this thread.
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Apr 16, 2014 17:25
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PT6A posted:You are the mopiest, most defeatist person I've ever seen in my life. You should go to a doctor and see if you're actually clinically depressed or something because, drat. So what do you think will happen?
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Apr 16, 2014 17:25
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Lexicon posted:I really don't know. It seems plausible to me that average standards of living simply drop as an outsized portion of the country's wealth pours into housing and debt service, and there's less money for other things. Since so many Canadians are thoroughly invested in the status quo, this might be the equilibrium outcome. That may be the equilibrium solution that those invested are praying for, but I cannot imagine that we will stay there for too long. Too much money is being spent on housing. There is no way it can stay in equilibrium for long. Even a minor increase in rates, or downturn in the economy is going to push large groups of people from "barely keeping ahead of payments" to "lol nope". Vancouver's reputation of being filled with nothing but oil sheiks and Chinese robber barons notwithstanding.
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Apr 16, 2014 17:25
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Cultural Imperial posted:So what do you think will happen? Who knows? I don't think the market is stable, by any means. It's probably correct that outlying areas (particularly expensive houses/condos) in those areas will be first and hardest hit, with more "desirable" locations taking less of a hit. I think both the low-end and the high-end will probably suffer the worst, with a more gradual decline for mid-range dwellings. It will hurt in the short term, particularly people who use residential real estate as something other than a place to live (i.e. an "investment"), but I expect it will recover in reasonably short order (a matter of years, not decades) to where prices "should" be.
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Apr 16, 2014 17:30
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PT6A posted:Who knows? I don't think the market is stable, by any means. It's probably correct that outlying areas (particularly expensive houses/condos) in those areas will be first and hardest hit, with more "desirable" locations taking less of a hit. I think both the low-end and the high-end will probably suffer the worst, with a more gradual decline for mid-range dwellings. It will hurt in the short term, particularly people who use residential real estate as something other than a place to live (i.e. an "investment"), but I expect it will recover in reasonably short order (a matter of years, not decades) to where prices "should" be. But why do you think it will recover? What will cause it to recover?
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Apr 16, 2014 17:35
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As long as we keep reducing taxes and environmental regs the tar sands will keep the country afloat, at least for the people that matter.
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Apr 16, 2014 17:36
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ocrumsprug posted:Even a minor increase in rates, or downturn in the economy is going to push large groups of people from "barely keeping ahead of payments" to "lol nope". Yeah - hence my point about central bank independence.
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Apr 16, 2014 17:38
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Lexicon posted:Yeah - hence my point about central bank independence. Well, that only matters to the people that are on variable mortgages. If you are on a 2-5 year mortgage, your rate is tied to the bond market. The central bank also has limited bullets left to deal with the normal economic downswings, let alone something seriously bad like the GFC of 2008.
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Apr 16, 2014 17:42
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Cultural Imperial posted:But why do you think it will recover? What will cause it to recover? Because people need places to live. It's not going to reach pre-crash levels, because we are in a bubble, but it will recover to a certain point (again, mid-range properties in desirable locations first). I don't think Vancouver and Toronto are suddenly going to become post-apocalyptic hellscapes when the crash comes; they'll probably still be pretty desirable. Renters who've saved money up, or investors who have held off entering the market, will be well-advised to buy at that point, as they'll pay below the true value of the property. As this happens, demand will rise, and prices will rise to reflect a fair value for the properties in question.
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Apr 16, 2014 17:43
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Baronjutter posted:Also I think what a lot of people will call "stagnation" may not actually adjust for inflation and we'll see housing prices eventually end up where they "should" be, but never because the sticker price went down, only because inflation went up. So like that 700k house today is worth 705k in 10 years. To a lot of people that will be seen as "holding steady" and they'll not flip out and continue to support the prudent financial policies of our stable nation and banking systems. Here lies Baronjutter He never scored (a house in Fairfield)
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Apr 16, 2014 17:49
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PT6A posted:Because people need places to live. It's not going to reach pre-crash levels, because we are in a bubble, but it will recover to a certain point (again, mid-range properties in desirable locations first). I don't think Vancouver and Toronto are suddenly going to become post-apocalyptic hellscapes when the crash comes; they'll probably still be pretty desirable. Renters who've saved money up, or investors who have held off entering the market, will be well-advised to buy at that point, as they'll pay below the true value of the property. As this happens, demand will rise, and prices will rise to reflect a fair value for the properties in question. Ok so fundamentally you think the supply of housing is just about right and that demand is pretty elastic?
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Apr 16, 2014 17:52
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ocrumsprug posted:Well, that only matters to the people that are on variable mortgages. If you are on a 2-5 year mortgage, your rate is tied to the bond market. The central bank also has limited bullets left to deal with the normal economic downswings, let alone something seriously bad like the GFC of 2008. I'm talking about the implications for CAD devaluation, for which the BoC has unlimited bullets. I'm not 'predicting' this, nor is macroeconomics within my pay grade, but it would seem like one plausible way for housing to retain its 'nominal' value.
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Apr 16, 2014 17:54
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I don't think it's mopey to take this view of our economy, w/r to FIRE in particular. Young people just need to get used to the idea of not owning lovely $600K bungalows and townhouses. That people get depressed about not owning these things is, somewhat ironically, at least partially responsible for their current valuations. I gave up on home ownership years ago - - not because I couldn't (or can't) afford it, but because I couldn't justify it at these prices. That so many people in worse financial positions *can* justify it is very interesting to me, and it says a lot about our cultural values. It's seriously not a terrible life to make okay money, have conservative, diversified investments (even if you don't have much to invest), rent, and enjoy cash flow / not servicing a pile of volatile debt.
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Apr 16, 2014 17:55
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I'm really curious to see what's going to happen here in Whistler. I mean house prices here have already dropped like 30%+ compared to their peak in 2010, it'll be interesting to see if the whole village blows up.
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Apr 16, 2014 17:57
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HookShot posted:I'm really curious to see what's going to happen here in Whistler. What caused that big drop in Whistler? CADUSD's performance over the past half-decade couldn't have helped. Personally, I think Whistler priced itself out of the market (skiing-wise). Back when I lived in Vancouver, it got to the point that I'd started doing day-trips to Mt. Baker rather than Whistler. At half the cost (and generally better powder and cheap cheese & gas on the way home to boot), Whistler became increasingly difficult to justify.
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Apr 16, 2014 18:13
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Lexicon posted:What exactly changed for these places? Serious question. I'm not in a place where I can do a blog sized post about it right now, unfortunately. BJ hit most of the nail on the head quite succinctly with his second post up there, to be honest, but it misses the element which this entire thread is about : Real Estate Values. There's a ton of small towns in BC which were "obsolete" well over fifty years ago, such as the former Granby Consolidated company towns down around Grand Forks. Basically anywhere which was built to extract a specific resource which no longer exists, or the even smaller settlements which sprung up around rest houses on a wagon road and just sort of clung on through the automobile era somehow. All of these places should, in our economic reality, just have gone poof. There's no reason for them to exist, once the primary industry vanished. They clung on because rural BC has historically always been a remote and dirt loving cheap place to live where you could buy a house for a pittance and manage to scrape by. Towns were resilient, they found new revenue streams. By proxy, because so much of the province was viewed as a barely tamed backwater for much of the 20th century, big-box franchises were rare compared to locally owned businesses. It was a tenuous economy, but one which managed to perpetuate a lot of these towns well paste the date where they should have become history. Come the end of the 1990's, when the Vancouver Real Estate Malaise started spreading further afield, and this is no longer even true for the most remote of communities. Property values exploded virtually overnight, to the extent that places which have literally been labelled "Abandoned Locality" on maps for decades (Bralorne, Gold Bridge, etc) are now selling for well over $100,000. Localized faux-booms like Revelstoke Mountain or the Alcan de-expansion saw house prices increase over 10x in under a year. Rents went through the roof everywhere as property traded hands feverishly, and multinational franchises such as wal-mart spread through the mid-sized towns of the interior at a stunning pace, putting local stores out of business and jacking unemployment as they hired TFW's en-masse during the labor shortage of '06-'08. The end result of all this was the complete shredding of the economic and social fabric of most of these small towns. The middle class either cashed out massively or went bankrupt, and moved to the cities. The poor moved to the cities, because there is employment here. The young, having it drilled into their heads to go to university, left either to go to university in a city or to overdose on cocaine in the oil patch. The only ones left are those too elderly to leave, and those too utterly destitute to move elsewhere. Centralization of services in larger population centers has seen ICBC, MCF, and even the RCMP pull out of many places in favor of remote dispatch. Nobody is ever going to move back to these small towns unless forced to due to a bizarre employment transfer: why would anyone pay the same amount for a house in 100 Mile House as a house in Vancouver, when the price is the same but the gap in amenities is so vast? tl;dr: Real estate speculation destroyed BC by kneecapping a fragile economic balance. Best I can do from my phone, probably reads like disjointed poo poo. 
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Apr 16, 2014 18:16
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^^^: Thanks for that. Education seems to be an under appreciated part of the migration to Vancouver. Everyone leaves their boondock town, gets an education and cannot really return home as there is no call for whatever they got educated in there. Even the larger towns suffer from it.Lexicon posted:I'm talking about the implications for CAD devaluation, for which the BoC has unlimited bullets. I'm not 'predicting' this, nor is macroeconomics within my pay grade, but it would seem like one plausible way for housing to retain its 'nominal' value. Oh they certainly can do that, and while I am also not particularly qualified to discuss macro-economics, isn't that something that is only really effective for sovereign debt? If I owe 1 million to my local CIBC and my currency is devalued, I still owe my bank a million dollars that that needs to be paid from salary. How that currency is valued externally is immaterial. ocrumsprug fucked around with this message at 18:57 on Apr 16, 2014 |
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Apr 16, 2014 18:19
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Lexicon posted:What caused that big drop in Whistler? CADUSD's performance over the past half-decade couldn't have helped. As far as I understand it from people who have lived here for a while, it was "OH MY GOD AFTER THE OLYMPICS PRICES ARE GOING TO GO UP FOREVER" coupled with the fact that prices went so high that weekend warriors stopped being able to afford vacation properties, because seriously who the gently caress pays $400k for a one bedroom basically hotel room. Beyond that I don't really know what the reason was, but I know that prices now are around what they were in 2002-2003, and they show zero signs of going up again. The last BC assessment had prices dropping some more.
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Apr 16, 2014 18:52
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Against my advice, a good friend of mine is constantly shopping for a place to buy in Whistler. He's been looking for over 2 years and his comment to me recently was that the housing stock is completely poo poo at the 300-400k price level.
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Apr 16, 2014 19:05
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I'll never understand why people make such horrible choices in buying. I really would like a little house, but not at these prices. I know what I can afford and I know what's a good value or a risk, it's not rocket science. Like the person buying a 400k langford condo, having people tell them it's a bad purchase, then having their realtor tell them its a "hot up and coming area!" then get all pissed off but at the same time incredibly defensive about their purchase when it's worth 300k a few years later. So many of these people are buying these insanely expensive properties not just because it's something they really want, but because they think it's a good investment, and they weigh their choice to buy or not heavily on that. What's 700k for a 2br bungalow if you know it will be worth even more when you sell? Like there's the person who spend 1 million on their dream house because they're rich and it's their dream house and they buy things they want to buy and can afford. Then there's the person spending a million on their dream house because it's their dream house but they aren't rich and can't quite afford it but they can sell it for more later when they retire so it's all good. Baronjutter fucked around with this message at 19:18 on Apr 16, 2014 |
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Apr 16, 2014 19:11
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Baronjutter posted:I think we're going to see almost-crash level prices in the far suburbs, specially condos in the farthest suburbs, of major cities. But the cities them selves won't see huge drops, just stagnation. So for instance that awful cheap 1,200 sqft condo in the rear end end of Langford you paid 400k for is now worth 250k but the house in a core Victoria neighbourhood you paid $750k for is now worth $700k and 5 years from that it's worth $700k + inflation. Kirkland & North Seattle, -5% Renton, Lynnwood, -15% Issaquah, Kent, Everett, -25%ish iirc BTW my tenants are moving out and just bought a home. They tell me it's a febrile market once again. People are doing the, 'submit your offers all week and we'll entertain all of them together on Sunday night," thing, which practically guarantees escalation clauses, dropping pertinent contingencies, and a general deeding frenzy.
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Apr 16, 2014 19:30
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