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.

Tochiazuma: Feb 16, 2007

In Synecdoche this scene is a metaphor but I think it captures the Vancouver real estate bubble nicely:

https://www.youtube.com/watch?v=SF9yFCSICE8

# ? Aug 19, 2016 00:58

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# ? May 24, 2024 19:42

I would blow Dane Cook: Dec 26, 2008

Do you feel like you have too many brain cells? This article can help

quote:

Why Chinese buyers are winning at auctions

CHINESE buyers are increasingly beating locals to the punch at auctions � and it�s not just because they have more cash to throw around, according to one leading auctioneer.

James Pratt, director of auctions for Raine & Horne and J Pratt Realty, says the skill set of Chinese buyers at auctions is �absolutely through the roof� compared with a few years ago.

�Four or five years ago there were always buyers� agents or interpreters there with them,� he said. �Now I�m seeing really high-performance bidding from Chinese whose second language is English.�

That means coming with a clear set of tactics rather than just �hoping for the best�, he said.

He cites a Chinese buyer who recently outperformed five other registered parties at an auction for a luxury CBD property by immediately opening the bidding, bidding in uneven increments, and then only rejoining the bidding right before the fall of the hammer.

�That shows to me someone who�s got a game plan,� he said.

Gavin Norris, chief executive of Chinese international property website Juwai.com, said Chinese buyers were frequently nervous about auctions up until a few years ago.

�Australia is one of the countries where Chinese buyers are most likely to encounter an auction � it�s much less likely in the UK, the US or Canada,� he said.

�They often had someone with them who would interpret the proceedings for them. Their uncertainty often slowed the auction down so they could keep track of what was happening.�

Today, he said, Chinese buyers are among the most sophisticated at auctions.

�It�s not because they overpay,� he said. �It�s because, like every smart buyer, they fight for every dollar.

�If a Chinese buyer doesn�t feel comfortable at an auction, they very commonly ask a friend or family member who is more experienced to stand in for them. That tends to produce some individuals who are highly skilled and very cool and comfortable under pressure.�

Mr Pratt, who is averaging a particularly slow 20 auctions per week at the moment, said there was still a lot of strong interest from Chinese across the board despite recent attempts to slow out-of-control house price growth.

http://www.news.com.au/finance/real-estate/buying/why-chinese-buyers-are-winning-at-auctions/news-story/0c4698c9359da405abe09fe7df19cb53

# ? Aug 19, 2016 04:20

Illuminti: Dec 3, 2005; Praise be to China's Covid-Zero Policy

Jumpingmanjim posted:

Do you feel like you have too many brain cells? This article can help

http://www.news.com.au/finance/real-estate/buying/why-chinese-buyers-are-winning-at-auctions/news-story/0c4698c9359da405abe09fe7df19cb53

What, are you allowed to make throat slitting gestures and stare down rival bidders in an Australian auction?

I always thought it was about simply bidding more money, apparently it more to do with technique, like raising your hand in a particularly inviting way.

edit: top tip from the article

quote:

�If the property is going to pass in, be sure to make the last, highest bid. That ensures by courtesy that you have the first right to negotiate with the seller after the event.�

That would be key, yes.

# ? Aug 19, 2016 11:36

Bip Roberts: Mar 29, 2005

OSI bean dip posted:

http://www.cbc.ca/news/business/kristy-shen-bryce-leung-1.3724450

Can't buy a haircut.

# ? Aug 19, 2016 11:56

Shifty Pony: Dec 28, 2004; Up ta somethin'

Illuminti posted:

What, are you allowed to make throat slitting gestures and stare down rival bidders in an Australian auction?

I always thought it was about simply bidding more money, apparently it more to do with technique, like raising your hand in a particularly inviting way.

edit: top tip from the article

That would be key, yes.

No there is a skill to bidding in an auction, similar to betting in poker. You don't want other bidders to know (or think they know) that you are reaching your limit and that they can beat you by bidding just a few times more and that sort of thing. You can also gently caress it up and get into a back and forth which drives the price up when it would have otherwise sold for less.

# ? Aug 19, 2016 12:44

Mozi: Apr 4, 2004; Forms change so fast
Time is moving past
Memory is smoke
Gonna get wider when I die; Nap Ghost

I'm all in!

# ? Aug 19, 2016 14:55

Fried Watermelon: Dec 29, 2008

The real trick is to artificially bid high on poo poo you don't want and then force the other guy to pay much higher when he wins

# ? Aug 19, 2016 16:07

leftist heap: Feb 28, 2013; Fun Shoe

Victoria has nowhere to go but up uP UP!

https://www.reddit.com/r/VictoriaBC/comments/4ylsz1/trying_to_find_a_rental_in_victoria/

quote:

Depends on what you mean by major. There are certain areas in Greater Victoria that are definitely over valued right now for certain types of homes. That said, I don't think we are going to see a massive correction like many are hoping for.
Bank lending is not particularly irresponsible here. The people that own in Victoria can afford their homes. It might be tight, but unless interest rates jump significantly I don't think we are going to see people suddenly unable to afford their mortgage. The Bank of Canada has historically been careful with prime and is cognizant of what happened in the USA.

Mid range and low end condos haven't inflated very much in value. The current explosion in prices has been for full houses and condos in desirable areas. Condos have been shrinking in size in Victoria, though. Newer condos are significantly smaller than ones built in the '70s and '80s. (Nobody buys condos from the '90s in Victoria.)

Victoria is becoming more desirable, not less desirable. Technology growth here has increased dramatically over the last 10 years. On top of that our tourism business has started to increase again after years of decline, likely due to the low Canadian dollar and those cruise ships everyone in James Bay hates.

Victoria is only so big. There isn't much room for sprawl here unless there are some significant transportation upgrades that make Sooke, Shawnigan, Mill Bay, etc. more viable.

Those things in mind, what I think we will actually see in Victoria is that the housing prices will stabilize. They might then slowly start to decline, but it will be a slow correction and it won't ever drop to pre-2015 prices. More likely is that housing here densifies and more condos become available. I also expect to see Sooke and Mill Bay grow significantly over the next 10 years. Houses will stay high and become increasingly something only high income families have while the rest of us get condos or rent indefinitely.
Victoria will continue to become more expensive in general; however, our nightlife and things to do list will grow.

Invest in Mill Bay now or be priced out forever.

# ? Aug 20, 2016 18:12

mastershakeman: Oct 28, 2008; by vyelkin

It's OK that you have to live in a shoebox, because we'll have so many bars and restaurants to go spend your (nonexistent) money at you'll never need to go home! just like new York!

# ? Aug 20, 2016 18:56

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

mastershakeman posted:

It's OK that you have to live in a shoebox, because we'll have so many bars and restaurants to go spend your (nonexistent) money at you'll never need to go home! just like new York!

Are you forgetting that travelling from office tower to micro brewery to condo tower every day until you die is the pinnacle of human existence?

# ? Aug 20, 2016 19:26

etalian: Mar 20, 2006

Bip Roberts posted:

Can't buy a haircut.

lol

# ? Aug 20, 2016 19:46

namaste friends: Sep 18, 2004; by Smythe

http://www.news1130.com/2016/08/21/nobel-prize-winning-economist-proposes-capital-gains-tax-on-luxury-canadian-real-estate/

STIGLITZ MOTHERFUCKERS

# ? Aug 22, 2016 04:19

the talent deficit: Dec 20, 2003; self-deprecation is a very british trait, and problems can arise when the british attempt to do so with a foreign culture

namaste faggots posted:

http://www.news1130.com/2016/08/21/nobel-prize-winning-economist-proposes-capital-gains-tax-on-luxury-canadian-real-estate/

STIGLITZ MOTHERFUCKERS

this is so obviously necessary and also intelligent that it will never happen here

# ? Aug 22, 2016 07:32

Professor Shark: May 22, 2012

quote:

�If the property is going to pass in, be sure to make the last, highest bid. That ensures by courtesy that you have the first right to negotiate with the seller after the event.�

*Takes notes*

# ? Aug 22, 2016 13:47

I would blow Dane Cook: Dec 26, 2008

Pass in means that the property did not reach the reserve price. The article is not that retarded.

# ? Aug 22, 2016 13:54

Professor Shark: May 22, 2012

It still sounds like "Just bid the highest"

# ? Aug 22, 2016 15:06

HookShot: Dec 26, 2005

So apparently our landlords were just waiting for the market to get better before selling, so we might have to move for the second time in three years due to landlords selling our place.

I can't wait for the market to collapse.

# ? Aug 22, 2016 15:12

Ambrose Burnside: Aug 30, 2007; pensive

"being a renter in vancouver or toronto right now" in itself makes a convincing emotional case for rental properties being confiscated by the state en masse, the landlord abolished as a rent-seeking class adn housing administered as a public asset

# ? Aug 22, 2016 15:15

namaste friends: Sep 18, 2004; by Smythe

Full communism now

# ? Aug 22, 2016 15:31

Ambrose Burnside: Aug 30, 2007; pensive

u always know just waht to say to make a gal blush, CI

# ? Aug 22, 2016 16:35

Femtosecond: Aug 2, 2003

Vancouver could be like Vienna and build massive amounts of publicly owned housing, though that would involve giving incentives to developers, which does not seem terribly popular in this thread.

(It would also require tons of federal funds)

quote:

http://www.governing.com/topics/economic-dev/gov-affordable-luxurious-housing-in-vienna.html
...
The jury�s selection of a development triggers two events: First, the city agrees to sell the land at an affordable price, and second, the city agrees to give the developer an extremely favorable loan. Those loans cover 35 to 40 percent of a project�s cost at an interest rate of just 1 percent. Developers have 35 years to pay the loans back, but the clock doesn�t start until the last private loan has been paid off.

In exchange, developers who enter the arrangement must provide half their apartments to the city for rent. Those units generally go to lower-income Vienna residents -- the same profile as those who are on the waiting lists for council housing. The other half goes to tenants selected by the developer, who are generally middle-class. But those units are still more affordable than they�d be in a free market system, since the project has been so heavily subsidized.

...

How does a city pay for such a massive undertaking? Vienna gets about 450 million euros a year in federal funds earmarked for housing. In addition, the city contributes its own funding to the effort, upping its total public housing spending to about 600 million euros per year. Vienna officials are quick to point out that they don�t spend more than the U.S. on housing as a percentage of GDP. In addition, there is no mortgage interest deduction as there is in the U.S. -- Vienna chooses to subsidize developments rather than residents. Consequently, city officials say, they can exert vastly more influence on housing than their American counterparts.
...

Femtosecond fucked around with this message at 16:49 on Aug 22, 2016

# ? Aug 22, 2016 16:44

ocrumsprug: Sep 23, 2010; by LITERALLY AN ADMIN

Femtosecond posted:

Vancouver could be like Vienna and built massive amounts of publicly owned housing, though that would involve giving incentives to developers, which does not seem terribly popular in this thread.

(It would also require tons of federal funds)

Well, it seems like the CoV is the only landlord in the city not making their tenant's lives a living hell, so it would probably be an improvement.

What we will get though is more Olympic Village developments where you have "low-income" rentals, and units set aside for police, firemen and nurses since they are "at risk" of homelessness.

# ? Aug 22, 2016 16:53

mastershakeman: Oct 28, 2008; by vyelkin

Femtosecond posted:

Vancouver could be like Vienna and build massive amounts of publicly owned housing, though that would involve giving incentives to developers, which does not seem terribly popular in this thread.

(It would also require tons of federal funds)

just build some peach trees style mega towers

# ? Aug 22, 2016 17:15

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

ocrumsprug posted:

What we will get though is more Olympic Village developments where you have "low-income" rentals, and units set aside for police, firemen and nurses since they are "at risk" of homelessness.

To be fair, having these professions kept living within city limits is ultimately a good thing.

# ? Aug 22, 2016 17:19

Reince Penis: Nov 15, 2007; by R. Guyovich

OSI bean dip posted:

To be fair, having these professions kept living within city limits is ultimately a good thing.

Yeah I wish Toronto cops actually lived in Toronto.

# ? Aug 22, 2016 17:27

ocrumsprug: Sep 23, 2010; by LITERALLY AN ADMIN

OSI bean dip posted:

To be fair, having these professions kept living within city limits is ultimately a good thing.

I don't disagree. The fact that the city decided to do something about it, without triggering a conversation about how the three most stable professions in the world, were having housing challenges was pretty surprising.

# ? Aug 22, 2016 21:06

etalian: Mar 20, 2006

Femtosecond posted:

Vancouver could be like Vienna and build massive amounts of publicly owned housing, though that would involve giving incentives to developers, which does not seem terribly popular in this thread.

(It would also require tons of federal funds)

The Vienna model works because the city owns most of the land and buildings, hence has more leverage to dictate terms.

Also more fundamentally it works since the Austrian federal government provides lots of funding to subsidize the public housing model.

# ? Aug 22, 2016 22:37

Baronjutter: Dec 31, 2007; "Tiny Trains"

etalian posted:

The Vienna model works because the city owns most of the land and buildings, hence has more leverage to dictate terms.

Also more fundamentally it works since the Austrian federal government provides lots of funding to subsidize the public housing model.

Sounds good, let's get started on both after the crash.

# ? Aug 22, 2016 22:39

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

Shared on Facebook:

# ? Aug 23, 2016 03:37

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

This is gonna be good :munch:

# ? Aug 23, 2016 03:44

I would blow Dane Cook: Dec 26, 2008

You know where else has a 0% foreign buyers tax; Moose Jaw Saskatchewan.

# ? Aug 23, 2016 03:50

I would blow Dane Cook: Dec 26, 2008

Get in fast before they turn Mac the Moose into condos.

# ? Aug 23, 2016 03:50

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

Fort Mac will have a hell of a fire sale I am sure.

# ? Aug 23, 2016 03:58

I would blow Dane Cook: Dec 26, 2008

OSI bean dip posted:

Fort Mac will have a hell of a fire sale I am sure.

hehe

# ? Aug 23, 2016 04:06

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

OSI bean dip posted:

Fort Mac will have a hell of a fire sale I am sure.

I dunno, I think the recent weather has dampened the market.

# ? Aug 23, 2016 04:15

namaste friends: Sep 18, 2004; by Smythe

http://business.financialpost.com/news/fp-street/how-a-potential-housing-downturn-could-hit-hard-for-canadas-big-banks-eventually

quote:

How a potential housing downturn could hit hard for Canada�s big banks � eventually

Canada�s largest banks, which begin rolling out their latest earnings on Tuesday, are often seen as insulated from a potential housing downturn because about half the $1.6 trillion in total mortgage debt in this country is supported by government-backed insurance.

But the big banks would not be immune to a steep drop in prices, something that seems within the realm of possibility given early indications of cooling in Vancouver�s red hot market.

In a report Monday, equity analysts at National Bank Financial said softening house prices in Vancouver are expected to translate into weaker retail spending in British Columbia this fall, which could trigger a cascade of events leading to rising household credit losses for the banks.

�As home prices drop, households will spend less. As consumption falls in Vancouver, so too will employment,� the report said, concluding that a weakening job market �will in turn lead to rising household credit losses.�

The National Bank analysts, led by Peter Routledge, expect the Vancouver market will continue to be dampened by the additional property transfer tax that went into effect this month on residential properties purchased by foreign buyers.

Analysts don�t expect much fallout to be visible when Canada�s largest banks report third-quarter earnings this week, beginning with Bank of Montreal on Tuesday. As one veteran banking analyst put it: �Certain things need to happen before this becomes a big issue, and we are not there yet.�

But regulators are clearly concerned about heated pockets of Canada�s real estate market, including Vancouver and Toronto. The Office of the Superintendent of Financial Services has made a handful of recent moves intended to put greater scrutiny on mortgage underwriting practices, increase the amount of capital held against mortgages in markets where prices are rising rapidly, and impose more conservative stress testing for real estate at smaller financial institutions.

Ratings agency Fitch also zeroed on housing in a report Monday, placing particular emphasis on the recent decline in home sales in Vancouver. Fitch said the trend �suggests that the city�s market may already have begun to cool and is increasingly vulnerable to price declines if there is a rise in the unemployment rate.�

There is no question a significant slowdown could put more at risk than the banks� mortgage portfolios, says Jason Mercer, an assistant vice-president at Moody�s Investors Service who penned a report in June that pegged losses in a severe housing downturn at close to $12 billion for the country�s seven largest lenders including the big banks.

Mercer said Monday that any scenario that leads to a household �cash flow shortage,� such as a rapid rise in unemployment, would trigger a �hierarchy of credit sacrifice� with mortgages at the end of the line.

�Credit cards and autos would go first,� he said, adding that credit card debt is unsecured, which provides less recourse for banks.

The whole consumer credit picture is on the minds of analysts when they assess Canada�s big banks, and anything that could trigger widespread unemployment, even regionally, is closely watched because of the impact of unemployment on unsecured credit and other debt that isn�t backed by government guarantees.

This week, as bulk of the major banks report earnings, the focus is expected to be on the performance of the energy portfolios. Several banks took larger provisions for energy-related losses in the second quarter as a result of persistent low oil prices. And though sequential performance is expected to be someone flat, year-over-year comparisons should reflect the tough environment.

Analysts will also be watching how the banks respond to expected tighter net interest margins, which reflect the difference between the cost at which they lend and borrow money, and how they might cut costs to protect their bottom lines.
In a report late last week, Barclays analyst John Aiken noted that the spread between the government Canada�s two-year and 10-year bonds is �the narrowest it has been since the financial crisis,� which is bound to put pressure on the banks� margins.

The reporting season will be capped off next week by Bank of Nova Scotia, which releases earnings on Aug. 30.