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.

namaste friends: Sep 18, 2004; by Smythe

quote:

No risk of ‘bubble,’ Poloz says of Canada’s bloated housing market

The Bank of Canada’s top brass assured a parliamentary committee that Canada’s bloated housing market has not become a risky asset bubble, despite the central bank’s own calculation that house prices nationwide are roughly 20 per cent overvalued.

“We don’t believe we’re in a bubble,” Bank of Canada Governor Stephen Poloz said in testimony Tuesday to the House of Commons Standing Committee on Finance. He said Canada’s long-running boom in the housing market hasn’t been underpinned by the kind of rampant speculative buying that is the hallmark of an asset bubble.

“Our housing construction has stayed very much in line with our estimates of demographic demand,” he said. “There’s no excess.”

This despite the central bank’s own estimate, published last December in its Financial System Review, that Canada’s housing market is overpriced by between 10 and 30 per cent.

Mr. Poloz indicated that he believes the overvaluation is not a symptom of runaway prices and widespread investor speculation, but rather of ongoing strength in consumer demand spurred by historically low interest rates – rates that were cut by the central bank in order to keep consumer demand buoyant to support Canada’s economy during the Great Recession.

“This is one of the by-products of what we’ve been through. It’s not something that happened simply by itself,” he said. “It would be very unusual to have that andnot have a degree of overvaluation.”

Mr. Poloz added that the overvaluation doesn’t necessarily mean the market is in need of a 10-to-30-per-cent downturn to bring it back into balance. He said that rising incomes as the economy gains momentum could help close the affordability gap, without a sharp drop in home values.

“We believe that as the fundamentals catch up with it, it will be sustained,” he said.

Senior Deputy Governor Carolyn Wilkins added that the central bank still believes Canada’s overall housing market is “headed for a soft landing,” despite the sudden oil-shock upheaval that threatens considerable instability in Alberta’s until-recently booming housing sector.

“We’re not expecting whatever transpires in Alberta to create spillovers that, from a financial stability standpoint, would be worrisome for the rest of Canada.”

Mr. Poloz also defended the Bank of Canada’s surprise cut of its key interest rate in January, which critics fear may exacerbate Canadian households’ already hyper-extended mortgage and debt loads.

“On the surface, lower interest rates would be expected to promote more borrowing, which would increase this vulnerability,” he said in his opening statement to the committee. “However, in the near term, lower borrowing rates will actually mitigate this risk, by reducing payments for mortgage holders and giving us more economic growth and employment gains.”

“We believe that the best contribution the Bank can make to lowering financial stability risks through time is to help the economy return to full capacity and stable inflation sooner, rather than later.”

Mr. Poloz added that he believes the January rate cut, which reduced the bank’s key rate to 0.75 per cent from 1.00 per cent, is doing its job in helping the Canadian economy weather the effects of the oil shock – although he admitted that the evidence of the cut’s impact “is thin at this stage.”

“The evidence we have at present would be primarily in the export sector,” he said, where the resulting decline in the Canadian dollar has been boosting exporters’ Canadian-dollar cash flow and improving their price competitiveness in export markets.

“We also know that consumers with flexible rate mortgages are already getting lower payments,” he added.

Mr. Poloz reiterated that the non-energy segments of the Canadian economy are starting to assert themselves more strongly in the current quarter, as the impact of the oil shock that were felt in the first quarter and the 2014 fourth quarter begin to fade, and the pick-up in non-energy export demand gains momentum.

“Outside of the energy sector, other areas of the economy appear to be doing well,” he said in his statement. “The segments of non-energy exports that we expected to lead the recovery are doing so, and we expect this trend to be buttressed by stronger U.S. growth and the lower Canadian dollar.”

Specifically, Mr. Poloz noted that key Canadian export sectors tied to U.S. business investment – including machinery and equipment, building materials, metals and aerospace – are showing “very positive growth.” He noted that these leading sectors represent more than half of Canada’s non-energy exports.

He repeated the bank’s belief that the Canadian economy will bounce back from its estimated flat first-quarter growth starting in the second quarter, with momentum picking up even more in the second half of the year.

“We’re not suggesting that the oil shock was just a three or four month event and then it’s over,” he said. “What we’re suggesting is that there are other sectors of the economy that are very strong.”

Mr. Poloz also defended his controversial use of the word “atrocious” to describe Canada’s first-quarter economy in an interview with the Financial Times last month – a term many critics felt fuelled concern and confusion over Canada’s economic state. The Bank of Canada subsequently estimated that the economy had zero growth in the quarter.

“What I was trying to describe was that over the case of these first few months, the day-to-day data flow could look quite negative. And we wanted markets to understand that we already believed that the data could be quite poor,” he said.

“It’s certainly not our intent to surprise or to frighten people.”

Well I guess you have to remember he's speaking in terms of Canada as a whole. It's not his job to really give a poo poo about individual markets that make no sense like Vancouver and Toronto.

lol gently caress this country

# ? Apr 28, 2015 22:22

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# ? May 13, 2024 21:20

EvilJoven: Mar 18, 2005; NOBODY,IN THE HISTORY OF EVER, HAS ASKED OR CARED WHAT CANADA THINKS. YOU ARE NOT A COUNTRY. YOUR MONEY HAS THE QUEEN OF ENGLAND ON IT. IF YOU DIG AROUND IN YOUR BACKYARD, NATIVE SKELETONS WOULD EXPLODE OUT OF YOUR LAWN LIKE THE END OF POLTERGEIST. CANADA IS SO POLITE, EH?; Fun Shoe

For the past several decades Toronto Vancouver and Calgary have been a black hole of debt and misery and they've almost reached a point where they're going to tear apart the space time fabric of the country and we'll have an orgy of despair and confusion as the entire upper echelons of our society try to escape and those of us left behind end up living like rural Russians.

Gonna be neat to watch.

# ? Apr 28, 2015 23:02

UnfortunateSexFart: May 18, 2008; ð» ððð« ð·ððð·
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Ehhh Calgary has always been boom/bust. And Vancouver has always been boom, and so it always will be! jk, my mom was telling me the other day about when interest rates were 13% and every house on the block was for sale in the 80s. Which of course is when we chose to sell and move to New Zealand/Australia, only to come back when Sydney was in the shitter and Vancouver was booming again.

I don't get Toronto though. It seems to thrive only because there are lots of people there, and there are lots of people there so it thrives.

# ? Apr 28, 2015 23:19

Coxswain Balls: Jun 4, 2001

triplexpac posted:

Make sure to attempt any and all home repairs yourself, no matter how daunting. Also take photos of the progress for us

I'm in a similar situation as yourself, so please do this so I can learn from all your mistakes.

# ? Apr 28, 2015 23:26

Baronjutter: Dec 31, 2007; "Tiny Trains"

Reverse Centaur posted:

Ehhh Calgary has always been boom/bust. And Vancouver has always been boom, and so it always will be! jk, my mom was telling me the other day about when interest rates were 13% and every house on the block was for sale in the 80s. Which of course is when we chose to sell and move to New Zealand/Australia, only to come back when Sydney was in the shitter and Vancouver was booming again.

I don't get Toronto though. It seems to thrive only because there are lots of people there, and there are lots of people there so it thrives.

Yeah that's when my parents decided to sell their 2nd investment home. Everyone at the time even told them it was stupid and they couldn't pick a worse time to sell

# ? Apr 28, 2015 23:29

Femtosecond: Aug 2, 2003

Rime posted:

I can't blame them for trying to get the real estate valuation of the corridor out of the city, when the city has done the same to all the other land that CP gave them for free.

Yeah this is a good point. I believe the City offered CP some sort of contract where if the City ever changed its mind and development CP would be paid compensation, but I guess CP didn't go for it.

I don't think it's much in doubt that the gardeners have no real rights to the land. The controversy stems from the acts by CP being dick moves with no business case behind them.

# ? Apr 28, 2015 23:34

Baronjutter: Dec 31, 2007; "Tiny Trains"

Femtosecond posted:

Yeah this is a good point. I believe the City offered CP some sort of contract where if the City ever changed its mind and development CP would be paid compensation, but I guess CP didn't go for it.

I don't think it's much in doubt that the gardeners have no real rights to the land. The controversy stems from the acts by CP being dick moves with no business case behind them.

The railways are famous bastards, absolutely awful corporations of the worst sort and only accountable at the federal level for the most part, meaning they can gently caress over local communities. Then have them trying to deal with the shifty loving developer-owned Vancouver local governments? Real recipe for a fair and honest exchange.

# ? Apr 29, 2015 00:20

UnfortunateSexFart: May 18, 2008; ð» ððð« ð·ððð·
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Yeah both sides just wanna sell condos for lots of money, there's no good guys.

# ? Apr 29, 2015 00:27

PT6A: Jan 5, 2006; Public school teachers are callous dictators who won't lift a finger to stop children from peeing in my plane

Baronjutter posted:

The railways are famous bastards, absolutely awful corporations of the worst sort and only accountable at the federal level for the most part, meaning they can gently caress over local communities. Then have them trying to deal with the shifty loving developer-owned Vancouver local governments? Real recipe for a fair and honest exchange.

I like the way they told World's BEST MAYOR Nenshi to go poo poo in his hand, more or less, even if some of their passive-aggressive bullshit since has actually inconvenienced me personally.

# ? Apr 29, 2015 00:29

Femtosecond: Aug 2, 2003

Reverse Centaur posted:

Yeah both sides just wanna sell condos for lots of money, there's no good guys.

I dunno I think the notion that the City is wanting to scoop up this land for peanuts and then develop it is a tinfoil hat theory.

If you want to take the evil developer angle there's plenty of money to be made for the City by building the street car line, then up zoning parcels at major stops to higher density condos.

The fact that this plan has existed for so long, from government to government, makes me think it was made by urban planner technocrat street car nerds that would push back against any government scrapping it for short term gain. The street car plan along Arbutus makes too much sense not to proceed with. Even though Vision is clearly pro-development, they've made good decisions around transportation policy so I think they listen to their urban planners (somewhat).

# ? Apr 29, 2015 00:42

Rime: Nov 2, 2011; by Games Forum

I would imagine CP's position is that Vision may not be in power forever, and there is nothing stopping a garbage party like the NPA from selling the land to developer buddies down the road and they have done to CP gifted land in the past. Thus, it makes sense for them to play hardball now and run some trains up and down the rails.

I do not agree with it as a taxpayer, but it's certainly very understandable. :shrug:

# ? Apr 29, 2015 00:54

UnfortunateSexFart: May 18, 2008; ð» ððð« ð·ððð·
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Femtosecond posted:

I dunno I think the notion that the City is wanting to scoop up this land for peanuts and then develop it is a tinfoil hat theory.

If you want to take the evil developer angle there's plenty of money to be made for the City by building the street car line, then up zoning parcels at major stops to higher density condos.

The fact that this plan has existed for so long, from government to government, makes me think it was made by urban planner technocrat street car nerds that would push back against any government scrapping it for short term gain. The street car plan along Arbutus makes too much sense not to proceed with. Even though Vision is clearly pro-development, they've made good decisions around transportation policy so I think they listen to their urban planners (somewhat).

I am pretty sure this has nothing to do with street cars. That line was supposed to be where the Canada line was going until NIMBYs chased it east to Cambie. This is purely about condos, it's already a filthy rich area and no one wants public transit there.

Also street cars are retarded. RRT/skytrain 4 lyfe.

# ? Apr 29, 2015 01:17

UnfortunateSexFart: May 18, 2008; ð» ððð« ð·ððð·
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This place just sold for $1.35 million just west of the tracks. I expect "houses" like this to some day occupy the rail line area in the southern part, with another smaller laneway house in the back. And of course skinny condos closer to Broadway.

# ? Apr 29, 2015 03:41

Femtosecond: Aug 2, 2003

Reverse Centaur posted:

I am pretty sure this has nothing to do with street cars. That line was supposed to be where the Canada line was going until NIMBYs chased it east to Cambie. This is purely about condos, it's already a filthy rich area and no one wants public transit there.

Also street cars are retarded. RRT/skytrain 4 lyfe.

Everything you say about the NIMBYs is correct, but I'm still doubtful that the city would flip this for property development. At the moment no one in this neighbourhood is ready for increased density, and a street car line is not on the table for the immediate future, but I think the city is taking a very long view here and keeping options in place for when easier to develop areas* are fully developed, and more people make use of and recognize the advantages of public transit.

The city has gone to great effort to keep spaces open for future street car lines (eg. Pacific Boulevard, 1st Ave in the Olympic Village) and I think they want to keep the option on the table. Supposing the City bought the complete Arbutus lands tomorrow I'd expect it to remain a "greenway" for several decades before serious thought would go into whether it should be a street car line or not.

* eg. The entirety of the Cambie corridor

# ? Apr 29, 2015 04:01

EvilJoven: Mar 18, 2005; NOBODY,IN THE HISTORY OF EVER, HAS ASKED OR CARED WHAT CANADA THINKS. YOU ARE NOT A COUNTRY. YOUR MONEY HAS THE QUEEN OF ENGLAND ON IT. IF YOU DIG AROUND IN YOUR BACKYARD, NATIVE SKELETONS WOULD EXPLODE OUT OF YOUR LAWN LIKE THE END OF POLTERGEIST. CANADA IS SO POLITE, EH?; Fun Shoe

Didn't get the house. It went for way over asking. The agent didn't even ask us if we wanted to start a bidding war because she knew we're both at least somewhat financially literate and able to think ahead further than our next monthly payment.

# ? Apr 29, 2015 04:16

Jan: Feb 27, 2008; The disruptive powers of excessive national fecundity may have played a greater part in bursting the bonds of convention than either the power of ideas or the errors of autocracy.

EvilJoven posted:

Didn't get the house. It went for way over asking. The agent didn't even ask us if we wanted to start a bidding war because she knew we're both at least somewhat financially literate and able to think ahead further than our next monthly payment.

That's what you get for being financially responsible. For shame.

Seriously though, it sucks that taking the sane and responsible approach to homeowning results makes it impossible to actually land one. I'd be very curious to find out if the buyer's offer is actually within their means or if they're overstretching themselves for it... Guess you'll find out when the home gets foreclosed once the bubble bursts? :v:

# ? Apr 29, 2015 04:22

namaste friends: Sep 18, 2004; by Smythe

Warren buffet said something like "when the tide goes out then you'll know who's not wearing any pants".

# ? Apr 29, 2015 04:45

EvilJoven: Mar 18, 2005; NOBODY,IN THE HISTORY OF EVER, HAS ASKED OR CARED WHAT CANADA THINKS. YOU ARE NOT A COUNTRY. YOUR MONEY HAS THE QUEEN OF ENGLAND ON IT. IF YOU DIG AROUND IN YOUR BACKYARD, NATIVE SKELETONS WOULD EXPLODE OUT OF YOUR LAWN LIKE THE END OF POLTERGEIST. CANADA IS SO POLITE, EH?; Fun Shoe

Jan posted:

That's what you get for being financially responsible. For shame.

Seriously though, it sucks that taking the sane and responsible approach to homeowning results makes it impossible to actually land one. I'd be very curious to find out if the buyer's offer is actually within their means or if they're overstretching themselves for it... Guess you'll find out when the home gets foreclosed once the bubble bursts?

We keep waiting, our bank balance keeps getting bigger and if we don't buy until we're 40 then well by then the bubble will have probably burst and we'll be paying cash.

# ? Apr 29, 2015 04:56

namaste friends: Sep 18, 2004; by Smythe

Guess who's now a property speculator?

quote:

Province bets on rising land values

VICTORIA � The B.C. government has decided not to sell a parcel of surplus land near BC Place, as it bets that a City of Vancouver proposal to decommission the Georgia and Dunsmuir viaducts could send land values skyrocketing.

The 1,951-square-metre, triangle-shaped, lot wedged between BC Place and Rogers Arena could be a prime development site, though it is constrained by the Georgia viaduct, which cuts overhead across the lot.

The site is currently unused.

The province had considered the lot as part of an office tower development to help pay for renovations to BC Place. But more recently, the government declared the site surplus and prepared to sell it for an estimated $18 million as part of asset sales in 2013/14.

Government officials pulled the plug on the sale after learning Vancouver was seriously considering tearing down the viaducts, which could dramatically increase the land�s value.

Finance Minister Mike de Jong revealed Victoria�s previously unknown internal deliberations on the site at the legislature last week, in part as a retort to critics who�ve accused the Liberal government of being so desperate need to balance its budget that it sold numerous Crown properties at below-appraised values.

Transportation Minister Todd Stone expanded on the rationale at the legislature Tuesday: �This is a piece of property that�s been identified as a surplus asset for government, we obviously want to maximize this piece of land and depending on where the viaduct discussion lands at the end of the day it will impact the value of the land, no question.�

The property will be re-evaluated in 2017/18, according to a government statement.

The City of Vancouver has called the 1970s-era Georgia and Dunsmuir viaducts an urban scar and a physical and psychological barrier to improving street connections and redeveloping the northeast False Creek area.

Council is expected to make a decision about whether to dismantle the viaducts later this year.

The land near BC Place is called Site 10C and technically owned by PavCo, the government Crown corporation that operates the stadium and the Vancouver Convention Centre.

PavCo at one time had considered that southeast corner for a 26-storey tower, as part of plan for BC Place�s surrounding lands that could have helped pay for the refurbishment of the stadium. Instead, the province picked up the bill for the stadium renovations and retractable roof.

�There�s a tremendous opportunity here with whatever ends up happening with the viaducts, complemented with the sale of Site 10C and the potential development there, to potentially transform this whole zone of Vancouver in an extremely positive way,� said Stone.

A new $535-million casino-hotel at BC Place, under construction on the opposite side of the stadium from Site 10C, is also likely to increase land values around the stadium.

David Eby, who is also the MLA for Vancouver-Point Grey, praised the government move to hold onto the land so its value can increase. �It makes a lot of sense,� he said.

Eby said he wished government had exercised the same prudence on its other asset sales, including 14 lots on Burke Mountain in Coquitlam that government sold to a developer for $43 million below the appraised value.

Eby also pointed out that PavCo�s most recent service plan, released after the February provincial budget, describes how the government agency plans to oppose Vancouver�s removal of the viaducts if that in any way hurts BC Place�s financial situation.

Eby said the province and Vancouver are failing to communicate over a huge infrastructure decision.

�Given the importance of Vancouver economically to the whole of the Lower Mainland, I don�t understand how you can run a government without being in great communication with our largest city,� said Eby. �The viaducts are a symptom of that.�

http://www.vancouversun.com/touch/story.html?id=11012061

# ? Apr 29, 2015 05:13

namaste friends: Sep 18, 2004; by Smythe

http://www.theglobeandmail.com/repo...b+Article+Links

quote:

Don�t buy into the misplaced optimism of �Sunny Stephen�

After deeming first-quarter economic growth to be �atrocious,� Bank of Canada Governor Stephen Poloz has reclaimed the mantle of �Sunny Stephen,� a title bestowed on him by The Economist in 2013.

Pavilion Global Markets, however, believes that this �Canadian optimism is misplaced.� Strategists Pierre Lapointe, Alex Bellefleur, and Fran�ois Boutin-Dufresne advise investors to avoid the loonie and Canadian equities.

In his testimony before the House of Commons standing committee on finance, the head of Canada�s central bank asserted that non-energy exports would grow at a robust clip this year, with the lower Canadian dollar providing �a significant net benefit.� Under the surface, the labour market dynamics are improving, too, he added.

The American economy is firing on all cylinders, said the Governor, glossing over the string of weak core durable goods orders from south of the border. This bodes ill for business investment � a segment expected to serve as a key source of demand of Canadian goods.

Oh, and the nation�s real estate market? Overvalued, yes, but it�s not in bubble territory, according to the Governor.

Mr. Poloz�s optimism, to be fair, can be viewed as a contrarian indicator of sorts. In September, 2013, he claimed that �evidence suggests we are now close to the tipping point from improving confidence into expanding capacity.� A fortnight had not passed before then-senior deputy governor Tiff Macklem announced that the bank would be ratcheting down its estimate for growth in the second half of the year.

The bank�s diagnosis for 2015: Canada�s economy is in for a front-loaded oil shock.

The Canadian economy�s direct dependence on oil, no doubt, has been consistently overstated. But the extent to which higher oil prices and a lofty loonie have supported residential investment and consumer spending across the nation is much more of a wild card.

In that light, Pavilion�s strategists think the fallout from this decline in oil prices will have more parallels to the early 1990s, when a three-year 60-per-cent plunge in crude prices coincided with a slump in the Canadian real estate market.

�The situation of the 1990s has much in common with the current situation (peak housing, peak consumer debt, oil price shock, tight fiscal policy, relatively stronger U.S. growth),� they wrote.

Personal consumption growth, according to Pavilion, will be weak for a prolonged stretch.

�The problem is that this particular oil shock comes at a time when household debt is at a historical peak,� said the strategists. �The deterioration in Canadian consumer balance sheets will make the sector more vulnerable to the deterioration in the terms of trade.�

Conversely, David Doyle, an analyst at Macquarie, thinks the effect on the Canadian economy from this crash in oil prices would be similar to 1986 � the last supply-driven collapse in oil prices. Back then, the economy flatlined, with two non-consecutive quarters of negative growth during the year.

There are some problems with Pavilion�s case. Chiefly, that fiscal consolidation at the federal level has largely run its course, and at the provincial level, is not expected to be as severe as feared in oil-producing locales.

By the second half of 2015, according to the Bank of Canada, the positive effects of a stronger U.S. economy will outweigh the negative impact of lower oil prices, with non-commodity exports driving growth in Canada.

Mr. Poloz, however, has also often cited a �wedge� between foreign demand and Canadian exports. This gap may have a simple explanation: Within NAFTA, our market share position with the largest economy has collapsed.

�Mexico�s rise as a manufacturing power within NAFTA also spells trouble for Canada,� said Pavilion�s strategists.

In 1997, the United States imported twice as many goods from Canada than Mexico � an $82-billion gap. For the month of February, this gap has narrowed to just $781.5-million, according to data from Bloomberg.

�Canada may need much more CAD weakness to fully restore the export sector�s ability to sustain jobs and growth,� said Pavilion�s team, referring to the Canadian dollar symbol.

In talks with economists both in Canada and abroad, all seem to agree on a narrative for the nation�s economy: Lower oil prices will dent investment activity, but resurgent U.S. demand should give way to a renaissance of the Canadian manufacturing sector. Where they differ is on the timing and magnitude of this non-commodity uplift.

The notion that Canada�s manufacturing sector and competitive position have atrophied beyond the possibility of revival � or that Canadian manufacturers will be highly reluctant to expand capacity domestically after seeing their competitors who did so go out of business when the hard times and high loonie came � is an underappreciated worst-case possibility that would imperil the bank�s base-case scenario of a regional rebalancing of growth.

This is really worth reading. Luke Kawa is loving killing it, which is why he's going to work for Bloomberg.

# ? Apr 29, 2015 05:15

Baronjutter: Dec 31, 2007; "Tiny Trains"

To be fair holding onto a property knowing an area is going to be getting a massive upgrade is pretty sensible. We'd all be yelling at the government giving away property to developer friends for pennies if they sold it now knowing it was going to be worth way more later.

# ? Apr 29, 2015 05:24

Albino Squirrel: Apr 25, 2003; Miosis more like meiosis

PT6A posted:

Yeah, people told me "take the bus in Spain! It's great!" and I'm like, "but won't I get my head chopped off and nibbled on by a lunatic or something?" and they said, "No, it's completely different from North America and buses don't suck horribly!"

We'll see how that goes; I'm still taking the train most of the time.

The bus is generally nicer and more convenient than the train in Iberia, unless you spring for the AVE high-speed.

EvilJoven posted:

Oh gently caress no our mortgage is super low. Under 2.7%

We calculate what we can afford based on 5% so we know that 5 years from now if rates go up we aren't stuck with a house we can't afford and have to sell at a loss because nobody is buying.

The massive wiggle room between our actual housing costs and what we've budgeted for will be saved.

If there's one thing people in Canada need to learn, it's this. I asked my sister if her and her fianc� could afford her house if mortgage rates tripled and she was all "nope let's hope that doesn't happen! :downs:

"

Sucks you didn't get the place. See if there's anything appealing that's been on the market for a while, that's how my realtor was able to screw the sellers of our current house down.

# ? Apr 29, 2015 05:54

namaste friends: Sep 18, 2004; by Smythe

No it's pretty loving dumb. I'm not paying taxes so my government can play property speculator. Remember what happened to the potemkin village in 2008? Remember the hedge fund that was in charge? Fortress made it look like a sure thing didn't it?

# ? Apr 29, 2015 05:54

Femtosecond: Aug 2, 2003

quote:

A new $535-million casino-hotel at BC Place, under construction on the opposite side of the stadium from Site 10C, is also likely to increase land values around the stadium.

No I'm pretty sure this is going to be a white elephant and a giant failure just like the current casino.

# ? Apr 29, 2015 06:17

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

Baronjutter posted:

To be fair holding onto a property knowing an area is going to be getting a massive upgrade is pretty sensible. We'd all be yelling at the government giving away property to developer friends for pennies if they sold it now knowing it was going to be worth way more later.

Nope. That future value will be built into the price sans some risk premium of it not happening, and if they auction it properly they'd get a fair value. They shouldn't be speculating.

# ? Apr 29, 2015 06:24

Risky Bisquick: Jan 18, 2008; PLEASE LET ME WRITE YOUR VICTIM IMPACT STATEMENT SO I CAN FURTHER DEMONSTRATE THE CALAMITY THAT IS OUR JUSTICE SYSTEM.; Buglord

Reverse Centaur posted:

This place just sold for $1.35 million just west of the tracks. I expect "houses" like this to some day occupy the rail line area in the southern part, with another smaller laneway house in the back. And of course skinny condos closer to Broadway.

I saw this same house posted to a FB article by some Americans complaining about Canadian housing prices. While the space is absolute poo poo, it's by a beach, in Vancouver and has a piece of land albeit skinny. It's obviously over priced but it is not reflective of the market as a whole. If people wanna live in a detached in downtown vancity or Toronto they have to pay the speculators, flippers, and real estate wizards who drive up prices.

Just a bit outside the cities it becomes arguably reasonable, sort of.

Albino Squirrel posted:

If there's one thing people in Canada need to learn, it's this. I asked my sister if her and her fianc� could afford her house if mortgage rates tripled and she was all "nope let's hope that doesn't happen! "

This is exactly what people need to think about. I'm willing to bet a lot of households would lose their shirts if it rates even doubled let alone tripled.

Also what's with Canada and the race to own the largest possible house? i hear chatter around me frequently of people saying 2000 sq ft is not enough for 3-4 people to live comfortably :lol:

# ? Apr 29, 2015 06:48

Rime: Nov 2, 2011; by Games Forum

Femtosecond posted:

No I'm pretty sure this is going to be a white elephant and a giant failure just like the current casino.

I wonder how much the taxpayer contributed to this development. I know we just replaced a huge amount of the $500m+ BC Place roof last year due to structural flaws. :allears:

# ? Apr 29, 2015 08:12

I would blow Dane Cook: Dec 26, 2008

More silly news from the land down under:

quote:

Think New York Housing Is Expensive? Try Wollongong

SYDNEY�Anika and Grant Spears began looking for a bigger house late last year, when they learned they were expecting their third child. But the real-estate market in Sydney was soaring, and they couldn�t compete.

�After Christmas, we saw prices go through the roof,� said Ms. Spears.

They appealed to their bank, which agreed to lend them 1.5 million Australian dollars (US$1.2 million) for a two-bedroom semidetached beach house with a narrow backyard in Sydney�s eastern suburbs. The Spears put no money down on the house, which they plan to expand by adding a second floor.

�We were very lucky,� said Ms. Spears. The 37-year old isn�t concerned that mortgage repayments threaten to eat up around 62% of their household income during the nine months she plans to be on maternity leave.

Australian households have among the highest debt levels in the world, according to data from Barclays. As of December, their debt had risen to 194% of annual income, the highest in Australia since at least 1960, as far back as the Barclays data goes, and even higher than the U.S. peak of 135% just before the global financial crisis in 2007. Household debt in the U.S. stood at 107% of annual income in December.

That debt burden, combined with a slowing economy and rising unemployment, has led economists and the central bank to worry about households borrowing heavily to buy homes whose prices have soared. They are concerned a housing-market correction could derail already fragile consumer confidence and dent spending at a time where the economy is struggling to adjust at the end of a long mining boom.

�Australia�s leverage is in uncharted territory,� said Kieran Davies, chief economist at Barclays PLC in Sydney. �Households never deleveraged like in the U.S. after the financial crisis.� He expects debt levels to rise further because interest rates have fallen. That would make homeowners, and lenders, more vulnerable, Mr. Davies said�especially if unemployment increases, as the central bank predicts.

Australia sidestepped the global financial crisis because of the strength of its mining industry. But the collapse of commodity prices has hit the economy, driving unemployment to 6.1% from 4.0% in 2008 and leading the Reserve Bank of Australia to cut interest rates to a record-low 2.25%.

The picture isn�t all gloomy. The country�s banking sector remains among the sturdiest in the world, and bad debt as a percentage of all loans has fallen to the lowest level in nearly 20 years, according to UBS. But credit-ratings firms, including Fitch, expect default rates to increase.

The Spears were given their 100% mortgage because their current home and an investment property they bought a decade ago have doubled in value. �I know that house prices could fall if interest rates start going up, but we have an equity buffer to fall back on,� Ms. Spears said. The architect and her husband, a construction manager, hope to sell one of their properties next year at a A$700,000 profit.

Lower interest rates have led banks to aggressively market their loans. At the same time, many Australians have snapped up investment properties either for their higher yields or as a bet on rising prices. Official data showed almost 40% of home loans approved in February went to investors, compared with around 31% in early 2009, when interest rates had fallen because of the financial crisis.

Unlike in the U.S., where loans to consumers with low credit scores helped trigger the turmoil, the investors driving debt to record levels in Australia are mostly wealthy, though that wealth is largely based on the value of their real-estate holdings. Research published by the Reserve Bank in March found the wealthiest 40% of society owed about three-quarters of household debt.

�For every $1 of debt held by Australian households today, they have almost $6 of assets,� said Steven M�nchenberg, chief executive of the Australian Bankers� Association, an industry body representing the lenders. He said that households on average are 21 months ahead on their mortgage payments.

Still, regulators are getting increasingly concerned as the housing boom, which had been limited primarily to Sydney, the nation�s biggest city, spread to other parts of the country.

Home prices in Sydney have increased by nearly 39% just since June 2012, according to property data firm CoreLogic RP Data. But even in Wollongong, a steel town about an hour to the south, the median house costs roughly eight times annual median household income. By that measure, Wollongong is more expensive than New York City, according to a recent study by Demographia, a U.S. think tank.

Samuel Suarez, a 41-year old mechanical engineer, felt lucky three years ago when he found a two-bedroom apartment in an unremarkable building overlooking a highway noise barrier in Wollongong�s northern suburbs for A$236,000. �It�s really impossible to buy something in Sydney,� he said. �It�s unaffordable.�

Mr. Suarez asked friends and family to scrape together the 10% deposit, but the risk has paid off. The apartment�s value has soared by more than a third and the rent covers his mortgage costs, according to Mr. Suarez. That paper gain has made him confident enough to scale back his payments to interest-only and buy a second small house in Wollongong. That house is also rented out.

Mr. Suarez, his artist wife, Maria Paula Hoyos, and their two young children rent a cheap apartment in suburban Sydney, which they share with a student. When the kids are in bed, Mr. Suarez often clicks through a raft of spreadsheets to check his finances.

�You need to be prepared to take a lot of risk and be very disciplined,� he said. �But I like doing it because I know I�ll never be able to make that money in my regular job. I tell my wife: In two years� time, we�ll be able to afford the dream house we want to live in.�

Australia�s central bank warned in September that lending has become �unbalanced� in favor of property speculators. It is working with regulators on possibly introducing new restrictions on mortgage lending to prevent the market from overheating.

�Property investors in Australia have historically been at least as creditworthy as owner-occupiers, and mortgage-lending standards remain firmer than in the years leading up to the financial crisis,� the Reserve Bank said. �Even so, a broader risk remains that additional speculative demand can amplify the property price cycle and increase the potential for prices to fall later, with associated effects on household wealth and spending.�

Darren McCoy bought his first house in his early 20s and now, at 49, owns a handful of investment properties. He realized that the more assets he had, the easier it was to borrow.

�Why use my own money, if I can do it with bank money?� he said.

Recently, Mr. McCoy was in a bidding war for a townhouse in the trendy inner-Sydney neighborhood of Newtown. As the bids soared beyond the A$850,000 asking price, he backed off. �I�m an investor, not an emotional home buyer,� Mr. McCoy said. The townhouse sold minutes later for A$1.11 million.

http://www.wsj.com/articles/worry-over-debt-as-australian-house-prices-rise-1430207189

# ? Apr 29, 2015 13:12

OhYeah: Jan 20, 2007; 1. Currently the most prevalent form of decision-making in the western world

2. While you are correct in saying that the society owns

3. You have not for a second demonstrated here why

4. I love the way that you equate "state" with "bureaucracy". Is that how you really feel about the state

quote:

�We were very lucky,� said Ms. Spears. The 37-year old isn�t concerned that mortgage repayments threaten to eat up around 62% of their household income during the nine months she plans to be on maternity leave.

Wait, what? Isn't it considered "normal" that a household spends about a third of its net income on housing? No bank here would give a loan to buy a house if almost two thirds of your income would go into servicing that debt, especially considering the current, almost non-existent interest rates.

# ? Apr 29, 2015 13:39

namaste friends: Sep 18, 2004; by Smythe

They would if it were guaranteed by the government.

# ? Apr 29, 2015 14:11

mastershakeman: Oct 28, 2008; by vyelkin

OhYeah posted:

Wait, what? Isn't it considered "normal" that a household spends about a third of its net income on housing? No bank here would give a loan to buy a house if almost two thirds of your income would go into servicing that debt, especially considering the current, almost non-existent interest rates.

Also the zero down payment, although it's unclear if they cross collateralized other properties.

# ? Apr 29, 2015 14:39

triplexpac: Mar 24, 2007; Suck it
Two tears in a bucket
And then another thing
I'm not the one they'll try their luck with
Hit hard like brass knuckles
See your face through the turnbuckle dude
I got no love for you

EvilJoven posted:

Didn't get the house. It went for way over asking. The agent didn't even ask us if we wanted to start a bidding war because she knew we're both at least somewhat financially literate and able to think ahead further than our next monthly payment.

Sorry to hear that. As much as I buy into the doom and gloom about the housing market, I'd love to own a house at a reasonable price someday.

Do you know how much it ended up going for?

# ? Apr 29, 2015 15:02

Kraftwerk: Aug 13, 2011; i do not have 10,000 bircoins, please stop asking

I think most people in this thread are angry that the market priced them out of real estate before they were in a position to take advantage while it was cheap.

I'm definitely severely frustrated that in a very short time cost of living outpaced my income by miles. I can't find a place to live anywhere that doesn't strip me of like 50-60% of my income.

# ? Apr 29, 2015 15:06

Rick Rickshaw: Feb 21, 2007; I am not disappointed I lost the PGA Championship. Nope, I am not.

Kraftwerk posted:

I think most people in this thread are angry that the market priced them out of real estate before they were in a position to take advantage while it was cheap.

I'm definitely severely frustrated that in a very short time cost of living outpaced my income by miles. I can't find a place to live anywhere that doesn't strip me of like 50-60% of my income.

I have roommates that are paying for most of my townhouse. My $255k townhouse is only costing me $759 to live in, all utilities included. Minus the principal payment and I'm really down to under $200.

Otherwise I'd be paying 50% of my income for the place. As long as the value of my place doesn't crash (Halifax), these few years should really help me get ahead. It's worth it.

Owning a place and renting out rooms is totally different than sharing a rental with roommates. There's a respect for property that develops when the owner is living on site.

# ? Apr 29, 2015 15:19

Risky Bisquick: Jan 18, 2008; PLEASE LET ME WRITE YOUR VICTIM IMPACT STATEMENT SO I CAN FURTHER DEMONSTRATE THE CALAMITY THAT IS OUR JUSTICE SYSTEM.; Buglord

I got in during 2010, and now my house investment is up 30-40%. The mortgage is being serviced with sub 20% household net income.

I think in general people are servicing their total housing costs with 50% of their net income, which is ludicrous.

# ? Apr 29, 2015 15:25

SpannerX: Apr 26, 2010; I had a beer with Stephen Harper once and now I like him.; Fun Shoe

jm20 posted:

I got in during 2010, and now my house investment is up 30-40%. The mortgage is being serviced with sub 20% household net income.

I think in general people are servicing their total housing costs with 50% of their net income, which is ludicrous.

Yeah, the wife and I are at about 20% of our income, give or take a few points, depending on my overtime and all that. Our investement is probably up about 20%, but I'm not counting on it as an investment, just a place to live that is cheaper than renting a 3 bedroom around here.

# ? Apr 29, 2015 15:31

Twerk from Home: Jan 17, 2009; This avatar brought to you by the 'save our dead gay forums' foundation.

What's property tax like in Canada? All of this just blows my mind, the ~3% effective property tax rate in Texas means that even with homestead exemptions my coworkers are paying ~$20k property taxes per year on their ~$700k houses. I just can't imagine throwing away that much money.

# ? Apr 29, 2015 15:34

triplexpac: Mar 24, 2007; Suck it
Two tears in a bucket
And then another thing
I'm not the one they'll try their luck with
Hit hard like brass knuckles
See your face through the turnbuckle dude
I got no love for you

Twerk from Home posted:

What's property tax like in Canada? All of this just blows my mind, the ~3% effective property tax rate in Texas means that even with homestead exemptions my coworkers are paying ~$20k property taxes per year on their ~$700k houses. I just can't imagine throwing away that much money.

I asked my friend about this. She says the bank rolled her property taxes into her mortgage, so it adds $130 to every mortgage payment :psyduck:

Edit: And we're in Toronto so apparently that's pretty low, especially considering our property taxes pay for our transit and whatnot.

# ? Apr 29, 2015 15:38

computer parts: Nov 18, 2010; PLEASE CLAP

triplexpac posted:

I asked my friend about this. She says the bank rolled her property taxes into her mortgage, so it adds $130 to every mortgage payment

And what was the price of the house?

# ? Apr 29, 2015 15:39

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# ? May 13, 2024 21:20

triplexpac: Mar 24, 2007; Suck it
Two tears in a bucket
And then another thing
I'm not the one they'll try their luck with
Hit hard like brass knuckles
See your face through the turnbuckle dude
I got no love for you

computer parts posted:

And what was the price of the house?

I want to say it was roughly 750k. A nice deal for a detached house a 20 minute streetcar ride from downtown.

# ? Apr 29, 2015 15:40

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

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