Canada Housing/Debt: Trust me, I'm a landlord.

The Something Awful Forums > Discussion > Debate & Discussion > Canada Housing/Debt: Trust me, I'm a landlord.

Lexicon: Jul 29, 2003; I had a beer with Stephen Harper once and now I like him.

peter banana posted:

I can't believe MLS doesn't include days on market and price adjustments. What a crock of poo poo.

I've ranted many times about this: all this vast investment in housing, huge taxpayer liabilities, blah blah blah - and it's the most dysfunctional, information-asymmetric market you can possibly imagine.

# ? Sep 22, 2014 16:46

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# ? May 13, 2024 21:27

tagesschau: Sep 1, 2006; Guten Abend, meine Damen und Herren.

Jumpingmanjim posted:

If anyone remembered the tech boom there wouldn't be a housing boom.

But stocks can go down to zero, you see, and houses can't! (I have had almost literally those words said to me.)

# ? Sep 22, 2014 17:29

Lexicon: Jul 29, 2003; I had a beer with Stephen Harper once and now I like him.

tagesschau posted:

But stocks can go down to zero, you see, and houses can't! (I have had almost literally those words said to me.)

Such a statement betrays a vast ignorance of what a stock actually is (as well as a vast ignorance about the experience of Detroit, MI).

# ? Sep 22, 2014 17:33

apatheticman: May 13, 2003; Wedge Regret

peter banana posted:

I can't believe MLS doesn't include days on market and price adjustments. What a crock of poo poo.

I thought it did but only realtors could see

# ? Sep 22, 2014 19:15

Baronjutter: Dec 31, 2007; "Tiny Trains"

http://www.citylab.com/housing/2014...eowners/380188/

Interesting little article and infographics on renters vs owners, at least in the US. There really is a big political aspect to our urban forms and financial regulations. It's a known fact that low density areas of high home ownership skew conservative, and dense areas of rentals skew progressive. Things like transit, bike lanes, or any spending that isn't on highways and suburbia are going to be strongly resisted by conservative politicians because it both upsets their base, but it also transforms the physical environment in a way which can actually change voter habits.

That's something important to remember, that the massive subsidies, planning laws, and generally everything we do to encourage suburbia and home-ownership is absolutely essential for conservative politicians to maintain relevance and their voter base. Of course all parties do it because we're so loving addicted to this poo poo, but it's an existential matter for conservative political "culture" to keep this pattern of development and ownership going.

Baronjutter fucked around with this message at 19:23 on Sep 22, 2014

# ? Sep 22, 2014 19:18

Grand Theft Autobot: Feb 28, 2008; I'm something of a fucking idiot myself

It's also essential to propping up sectors of the economy that we've come to depend on so heavily. Construction, FIRE, automobiles, home improvement, non-durable consumer products, and lots of general services are all indirectly subsidized by pumping money into suburban subsidies.

Subsidizing suburbia was and remains one of the absolute key Keynesian policies of the post-WW2 USA and Canada.

# ? Sep 22, 2014 19:51

Franks Happy Place: Mar 15, 2011; It is by weed alone I set my mind in motion. It is by the dank of Sapho that thoughts acquire speed, the lips acquire stains, stains become a warning. It is by weed alone I set my mind in motion.

http://beautifulemptyhomes.tumblr.com/

I'm laughing pretty hard at work just thinking about some Chinese kleptocrat's parachute home in Dunbar being filled to the brim with greasy summer-punk squatters. :haw:

# ? Sep 22, 2014 20:23

Baronjutter: Dec 31, 2007; "Tiny Trains"

And that's why we'll never have any sort of squatting protections here. Security companies would have a field day though if every single empty house and even condo had to have some weekly or daily squatter check up. I mean it might even break the finances for some of them and they'd be forced to sell! The tragedy.

I'd love some massive 2nd home tax. Or even just a loving "your 2nd home doesn't get all the insane subsidies that your primary home does".

# ? Sep 22, 2014 20:31

Lexicon: Jul 29, 2003; I had a beer with Stephen Harper once and now I like him.

^ If they can't even be arsed to find tenants, I don't imagine a rent-a-cop doing a weekly check-around will break the bank.

# ? Sep 22, 2014 21:38

Baronjutter: Dec 31, 2007; "Tiny Trains"

Lexicon posted:

^ If they can't even be arsed to find tenants, I don't imagine a rent-a-cop doing a weekly check-around will break the bank.

What would be a simple and fair way to make empty 2nd homes and poo poo less prevalent ?

# ? Sep 22, 2014 21:56

melon cat: Jan 21, 2010; Nap Ghost

melon cat fucked around with this message at 04:17 on Mar 16, 2019

# ? Sep 22, 2014 22:03

cowofwar: Jul 30, 2002; by Athanatos

Baronjutter posted:

What would be a simple and fair way to make empty 2nd homes and poo poo less prevalent ?

A property bubble pop would do the trick.

# ? Sep 22, 2014 22:08

Baronjutter: Dec 31, 2007; "Tiny Trains"

I think it's very very hard to get people past that concept. Most people have this idea that you buy a house, say for 500,000 and then you spend 20 years or so paying that down and those monthly payments are just a bit higher than renting, and then you'll one day be done and then no rent ever again. That's really attractive. Pay rent for life and come away with nothing, or pay slightly higher rent for 20 years and have an asset worth more than you paid for at the end that you can sell and retire on? You'd be a loving idiot to do otherwise. Yeah markets go up and down but you'll always make a little profit after you sell because prices always go up. Transaction costs, property taxes, upkeep, unexpected repairs? Those are all minor incidentals not worth worrying about.

I've had people even tell me "I don't even expect to make a profit selling my house later, but at least I can sell it and get my equity. With renting you come away with nothing." It's a very simple and seductive form of financial illiteracy, and our society does nothing to educate or correct it, in fact there's billions spent on maintaining this ignorance.

# ? Sep 22, 2014 22:09

FrozenVent: May 1, 2009; The Boeing 737-200QC is the undisputed workhorse of the skies.

Baronjutter posted:

I've had people even tell me "I don't even expect to make a profit selling my house later, but at least I can sell it and get my equity. With renting you come away with nothing." It's a very simple and seductive form of financial illiteracy, and our society does nothing to educate or correct it, in fact there's billions spent on maintaining this ignorance.

There's also the issue of maintenance and depreciation, which these people always hand wave.

If a sinkhole appears right behind the place I'm renting and the house is no longer safe for habitation, I move. If the city condemns your house because it's in a landslide zone or whatnot... Yep. Happy retirement.

# ? Sep 22, 2014 22:50

etalian: Mar 20, 2006

Baronjutter posted:

I think it's very very hard to get people past that concept. Most people have this idea that you buy a house, say for 500,000 and then you spend 20 years or so paying that down and those monthly payments are just a bit higher than renting, and then you'll one day be done and then no rent ever again. That's really attractive. Pay rent for life and come away with nothing, or pay slightly higher rent for 20 years and have an asset worth more than you paid for at the end that you can sell and retire on? You'd be a loving idiot to do otherwise. Yeah markets go up and down but you'll always make a little profit after you sell because prices always go up. Transaction costs, property taxes, upkeep, unexpected repairs? Those are all minor incidentals not worth worrying about.

I've had people even tell me "I don't even expect to make a profit selling my house later, but at least I can sell it and get my equity. With renting you come away with nothing." It's a very simple and seductive form of financial illiteracy, and our society does nothing to educate or correct it, in fact there's billions spent on maintaining this ignorance.

Yeah, Plus the whole downpayment thing and also sinking all your eggs in one basket hoping the house will have positive equity in the future after taking into account extra costs like home repairs/maintenance.

For the downpayment alone you basically locked in money now instead of letting it grow over time through things such stock/bond dividend returns.

# ? Sep 22, 2014 23:02

Lain Iwakura: Aug 5, 2004; The body exists only to verify one's own existence.; Taco Defender

It's hilarious to see the whole renter vs. owner argument come up even in my own family. My sister and her brother-in-law recently got married and as a result ended up with something like $30,000 in gift money to put a downpayment on a home. Based on assumptions from conversing with the two, they probably have $12,000 or so available prior to that (if they're lucky), and they're assuming with their $42,000 in savings that they'll have enough money to buy a home somewhere in Surrey. Their expectation is to get a 3-bedroom, bi-level home is going to be pretty interesting once they get told that their $80,000 combined income will barely get them a tiny shack.

Meanwhile I get accosted by them and other family members when my girlfriend and I (who have a combined income more than 1.5 that and soon possibly more) talk about not buying for a few years just because the market is bonkers and is due for a nasty correction.

Like I wouldn't mind owning my own home but I've gotten by for the past decade on renting and it has yet to fail me. For my sister and brother-in-law, it appears to be that they have the mentality that they're nothing until they own the place.

# ? Sep 23, 2014 00:06

Baronjutter: Dec 31, 2007; "Tiny Trains"

My friend was just telling me her dad has like 50k with her name on it for when she wants to buy, but she doesn't want to buy right now. He keeps mentioning the grant, but it only applies to buying a home. Just trying to help her start building equity.

My parents, who have nothing to give, were almost ready to re-mortgage their house to give me a lump sum so we can try to buy something. Boomers think their kids are going to die on the streets if they don't own a home asap.

# ? Sep 23, 2014 00:25

Grand Theft Autobot: Feb 28, 2008; I'm something of a fucking idiot myself

Just got a quote for a plumbing job that'll set me back a cool $750. Good thing I bought a house instead of throwing my money away renting!

edit: why not give her the 50k to invest until she's ready to buy?

Grand Theft Autobot fucked around with this message at 00:35 on Sep 23, 2014

# ? Sep 23, 2014 00:32

Baronjutter: Dec 31, 2007; "Tiny Trains"

That's what I told her. Take the money, put it in an e-series mutual fund and enjoy that ~%7 each year. But he's already got the money in mutual funds anyways so it's growing for her. So really not so bad.

But seriously the 1/3 rule really keeps finances in order. If more than 1/3 is going to housing you've hosed up, downside. Rght now in our apartment we're paying 30% so we're actually a tiny be below. But people I know who make less or just a tiny bit more are jumping all over vancouver-area condos and poo poo now

# ? Sep 23, 2014 00:50

Lain Iwakura: Aug 5, 2004; The body exists only to verify one's own existence.; Taco Defender

Baronjutter posted:

My friend was just telling me her dad has like 50k with her name on it for when she wants to buy, but she doesn't want to buy right now. He keeps mentioning the grant, but it only applies to buying a home. Just trying to help her start building equity.

My parents, who have nothing to give, were almost ready to re-mortgage their house to give me a lump sum so we can try to buy something. Boomers think their kids are going to die on the streets if they don't own a home asap.

I'd take the $50,000 and invest it into my RRSP and then let it go from there. Is she in her 20s? He'd be crazy to not let her do that.

# ? Sep 23, 2014 00:51

Baronjutter: Dec 31, 2007; "Tiny Trains"

I wish I was a better quantity surveyor or estimator or what ever. I often look at lots in the city and design houses for them that to me would be a "dream house" and they all come out wayyy higher than I could ever afford. I'm not designing anything huge, mostly under 1200sqft.

# ? Sep 23, 2014 00:54

namaste friends: Sep 18, 2004; by Smythe

http://www.bloombergview.com/articles/2014-09-22/irrational-exuberance-down-under

quote:

Lindsay David's new book on Australia deserves a medical disclaimer: Reading this will greatly raise your blood pressure.

In �Australia: Boom to Bust,� David sounds the alarm about an Australian housing bubble he argues makes the 12th-biggest economy a giant Lehman Brothers. His thesis can be boiled down to the number 9 -- the ratio of home prices to income in Sydney. The multiple compares unfavorably with 7.3 in London, 6.2 in New York and 4.4 in Tokyo (Melbourne is 8.4).

Housing is one of the three pillars of the Australian economy, along with financial institutions and natural resources. Politicians and investors alike, David writes, don't get �how deeply intertwined and connected� these sectors are and �how they can easily take each other down in a domino effect.� The most obvious trigger would be a Chinese crash that simultaneously hits bankers, miners and households hard.

I caught up with David last week in Sydney at a Bloomberg conference where I helped grill Treasurer Joe Hockey about these very topics. When I asked Hockey point blank whether Australia faced a huge property bubble, he dismissed the entire premise out of hand.

�It is just an easy mantra for international commentators and for analysts based overseas to say, �Well, there�s a bit of a housing bubble emerging in Australia,�� Hockey retorted. �That is a rather lazy analysis because fundamentally we don�t have enough supply to meet demand.�

Two hours later, Australia's central bank raised concerns about �speculative demand� that �could amplify the property price cycle and increase the potential for property prices to fall later.� If not exactly Australia's version of the �irrational exuberance� warning that will forever color the legacy of former Federal Reserve Chairman Alan Greenspan, that's still pretty strong language from a Group of 20 central bank.

The Reserve Bank of Australia wasn't rebutting Hockey; its concerns about an overheated housing market came in the minutes of its Sept. 2 meeting. Lazy analysis on the part of RBA Governor Glenn Stevens? Hardly. Nor are the folks at the Bank for International Settlements snoozing on the job when they warn that Australian housing is among the most overvalued anywhere.

There's something dangerously wrong when Australia's top economic official is blowing off fears of asset bubbles and heightened leverage. Sure, David's analysis can be hyperbolic in places. His bet that at least one of Australia's big-four banks will go bust, Lehman-style, or get nationalized puts him a bit out of the mainstream. On the other hand, Hockey's acerbic dismissal of the danger smacks of hubris. Home prices are seen rising between 8 percent and 12 percent in 2015 in Sydney and roughly 9 percent across Australia�s major cities. How can that make sense, in an already frothy market?

The RBA could start raising interest rates, but that would slam homeowners. Better to address the problem via macroprudential policy steps like setting limits on leveraged lending, lowering price-earnings ratios and raising minimum deposit levels. Federal lawmaker Kelly O�Dwyer, who leads a parliamentary inquiry into foreign investment, wants stronger policing of rules restricting overseas purchases; Chinese demand is partly responsible for price surges in Sydney and Melbourne.

In a striking bit of serendipity, G-20 officials met in Australia over the weekend to chew over the very risks Hockey had just dismissed. The communique they issued concluded: �We are mindful of the potential for a build-up of excessive risk in financial markets, particularly in an environment of low interest rates and low-asset price volatility.� In other words, low volatility will become problematic once rates rise. As the Financial Stability Board chaired by Bank of England Governor Mark Carney said on Sept. 18, investors are becoming complacent about financial-market risks.

On Sept. 16, Hockey made his own plea against moral hazard, saying �complacency is the enemy of economies around the world and none the least Australia.� But one wonders if Hockey isn't engaging in a similar kind of denial. As I've written before, Australia needs to work much harder to diversify growth engines that seem to become more China-centric with each passing year.

Arguably, no top-12 economy will be hit harder and faster if China falters than Australia's. So feel free to focus on the good news in the so-called Lucky Country: an enviable 3.1 percent growth rate and 6.1 percent jobless rate in a nation that's been recession-free for over 20 years. But as author David contends, it's a �Disneyland� fantasy to think housing prices can't crash in a place whose future is so linked to Beijing's bubbles.

It's uncanny when you compare :australia:

# ? Sep 23, 2014 01:13

Lexicon: Jul 29, 2003; I had a beer with Stephen Harper once and now I like him.

Hum. Greater Fool was about Australia tonight also.

# ? Sep 23, 2014 01:31

namaste friends: Sep 18, 2004; by Smythe

Lexicon posted:

Hum. Greater Fool was about Australia tonight also.

An Aussie couple who are dear friend to me are looking to buy a home. I really hope they don't.

# ? Sep 23, 2014 01:48

etalian: Mar 20, 2006

Cultural Imperial posted:

An Aussie couple who are dear friend to me are looking to buy a home. I really hope they don't.

With prices going up now's the perfect time to buy.

# ? Sep 23, 2014 01:49

Grand Theft Autobot: Feb 28, 2008; I'm something of a fucking idiot myself

Baronjutter posted:

That's what I told her. Take the money, put it in an e-series mutual fund and enjoy that ~%7 each year. But he's already got the money in mutual funds anyways so it's growing for her. So really not so bad.

But seriously the 1/3 rule really keeps finances in order. If more than 1/3 is going to housing you've hosed up, downside. Rght now in our apartment we're paying 30% so we're actually a tiny be below. But people I know who make less or just a tiny bit more are jumping all over vancouver-area condos and poo poo now

I'd go one better and say that if more than 1/3 goes to Housing + Transportation, you've hosed up.

# ? Sep 23, 2014 02:19

namaste friends: Sep 18, 2004; by Smythe

http://business.financialpost.com/2014/09/22/joe-oliver-says-canada-wont-make-major-changes-to-cmhc-housing-finance/

quote:

�Our educated opinion is that growth in house prices in Canada will moderate,� Siddall said. �If we are wrong, and price growth remains strong or accelerates, we may need to look to macro-prudential counter-weights to avoid excesses.�

Until now, the agency has been taking smaller measures to remove some of excesses from the market and reduce the amount of insurance it has in force, which is capped at C$600 billion. In June, it announced it would no longer insure financing for condominiums. In February, the agency said it will increase premiums on mortgage insurance by an average of 15 percent. In 2012, the government gave the country�s banking regulator new to oversee CMHC.

Holy poo poo I had no idea they stopped insuring condos.

# ? Sep 23, 2014 02:36

Baronjutter: Dec 31, 2007; "Tiny Trains"

No CMHC for condos?? That seems like big news, specially for Vancouver.

# ? Sep 23, 2014 02:39

namaste friends: Sep 18, 2004; by Smythe

I'd say it's the biggest news for Toronto.

# ? Sep 23, 2014 02:40

ocrumsprug: Sep 23, 2010; by LITERALLY AN ADMIN

They canceled condo developer insurance for their financing. You still get insurance if your a sucker a buy a condo.

# ? Sep 23, 2014 03:02

namaste friends: Sep 18, 2004; by Smythe

ocrumsprug posted:

They canceled condo developer insurance for their financing. You still get insurance if your a sucker a buy a condo.

Whoaaaaa are you saying developers can take out CMHC insurance to build poo poo?

what the gently caress

# ? Sep 23, 2014 03:05

FrozenVent: May 1, 2009; The Boeing 737-200QC is the undisputed workhorse of the skies.

Developers can get mortgages too.

# ? Sep 23, 2014 03:11

ocrumsprug: Sep 23, 2010; by LITERALLY AN ADMIN

Cultural Imperial posted:

Whoaaaaa are you saying developers can take out CMHC insurance to build poo poo?

what the gently caress

That was one of the CMHC original missions wasn't it?

# ? Sep 23, 2014 04:23

Lain Iwakura: Aug 5, 2004; The body exists only to verify one's own existence.; Taco Defender

ocrumsprug posted:

That was one of the CMHC original missions wasn't it?

That and to provide affordable housing until Mulroney decided to change it up.

# ? Sep 23, 2014 04:25

namaste friends: Sep 18, 2004; by Smythe

ocrumsprug posted:

That was one of the CMHC original missions wasn't it?

I knew that it was the CMHC's mission to help home buyers finance their homes but I had no idea it was part of their mission to finance developers.

# ? Sep 23, 2014 04:42

PC LOAD LETTER: May 23, 2005; WTF?!

peter banana posted:

I can't believe MLS doesn't include days on market and price adjustments. What a crock of poo poo.

Dunno about the details of the Canadian market but the US market had these and it didn't, still doesn't, matter as much as you think.

Why?

Because the banks and realtors got to juking the stats by pulling houses off and then putting them back on the market over and over again which reset days on market dates. They'd also reprice/reassess the property as needed. Its one of those open secrets that everyone in the US RE biz knows about but doesn't talk about publicly or even much in private.

# ? Sep 23, 2014 05:13

ocrumsprug: Sep 23, 2010; by LITERALLY AN ADMIN

PC LOAD LETTER posted:

Dunno about the details of the Canadian market but the US market had these and it didn't, still doesn't, matter as much as you think.

Why?

Because the banks and realtors got to juking the stats by pulling houses off and then putting them back on the market over and over again which reset days on market dates. They'd also reprice/reassess the property as needed. Its one of those open secrets that everyone in the US RE biz knows about but doesn't talk about publicly or even much in private.

This is actually super common in Canada too. The real estate boards also double/triple count sales as well for their monthly stats.

http://vancouverpricedrop.wordpress.com/

# ? Sep 23, 2014 05:30

Lexicon: Jul 29, 2003; I had a beer with Stephen Harper once and now I like him.

Isn't that relatively easy to defeat by using the postal address as the unique identifier for the listing? (Assuming we had a gov that wasn't in the pocket of FIRE and would make rules to benefit the public)

# ? Sep 23, 2014 05:34

ocrumsprug: Sep 23, 2010; by LITERALLY AN ADMIN

Lexicon posted:

Isn't that relatively easy to defeat by using the postal address as the unique identifier for the listing? (Assuming we had a gov that wasn't in the pocket of FIRE and would make rules to benefit the public)

It's their database, so who do you presume is looking to defeat the system?

# ? Sep 23, 2014 05:38

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# ? May 13, 2024 21:27

blah_blah: Apr 15, 2006

ocrumsprug posted:

It's their database, so who do you presume is looking to defeat the system?

You think a Realtor� knows what a primary key is?

# ? Sep 23, 2014 05:43

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