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qhat posted:I once thought it'd be neat to take a camera to Kits beach at night at the exact same location at the exact same time every day for the entire summer and point it towards the condos downtown and take a photo. Then generate a heat map for all the condos that have literally never had their lights turned on during that time. It could, quite literally, shine a light on property vacancy. Vancouver sort of already did this though they looked at BC Hydro data for anomalously steadily low usage rates to estimate at the amount of empty homes. Turns out there were some, but nothing that remarkable. Most importantly there hadn't been any significant change in inoccupancy for years and years all through the period that prices had increased, which suggested that the amount of empty homes wasn't really related to anything. quote:Empty homes study reveals 10,000 vacant condos but still fails to explain Vancouver real-estate prices lol no legend chart but ya true  We did find that there were empty apartments, and the empty homes tax, and BC Spec tax did bring a lot of those back into the rental market (~8000+ I believe). Vacancy is still absurdly low in Vancouver (I think 2.6%). Purgatory Glory posted:There is a supply issue that needs addressing. But the government has done so much to provide cover from getting proper data that we are having to guess on a lot of things. No No Probably Not. At the start of this crisis we had a serious look at empty homes, implemented taxes and addressed that issue. It was worth looking into because it was a plausable explanation, and we put some more homes back on the market, but no turns out it wasn't really the thing. We know at this point there aren't empty homes. There has been serious Airbnb regulations in Vancouver as well, and the amount of listings have dropped significantly even though I'm sure if one looks one can still find some abusers. Even after this vacancy remains extremely and unhealthily low. We know that supply is the problem because our metric of vacancy is way way too low. That it may be investors buying is a side issue because regardless of whether it's first time homebuyers or investors dominating buying, someone is living in that housing unit, and vacancy is still extremely low. In any situation where vacancy is so low, renters can be easily exploited because they have no options. When renters can be exploited, that's good for investors, and so they'll pile in too, which will increase prices. The only way we get to to the point of stagnant prices is if investors aren't making returns, and we'll only get to that if rents are stagnant and we'll only get to that if vacancy is +5% and higher, which is the only situation where renters can tell landlords to gently caress off if they try to raise the rent. Femtosecond fucked around with this message at 21:07 on Nov 8, 2021 |
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Nov 8, 2021 21:01
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Hubbert posted:I enjoy this thread because of its nuclear hot YIMBY takes. I re-read this without the 'hot' and just need a clarification on "nuclear YIMBY": are we talking reactors or bombs?
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Nov 8, 2021 21:18
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Fidelitious posted:This is why it seems like the 'small investors' have to put up ludicrous rents just so they can hang on long enough to sell off to the next rube. At current rates with a 25 year mortgage the monthly payments for a $1m with 5% down is a bit below $3,500. $3k/month in rental income would more than cover condo fees, interest and taxes, and the extra amount the owner pays to top it off is all going into equity, even if the price stays where it is for a few decades.
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Nov 9, 2021 00:23
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Femtosecond posted:Vancouver sort of already did this though they looked at BC Hydro data for anomalously steadily low usage rates to estimate at the amount of empty homes. Turns out there were some, but nothing that remarkable. Most importantly there hadn't been any significant change in inoccupancy for years and years all through the period that prices had increased, which suggested that the amount of empty homes wasn't really related to anything. So re: foreign buyers, one particular issue is people who came to Canada via the investor immigrant program, and are now citizens, but whose income still comes entirely from overseas. Those aren't "foreign" buyers under the speculation tax, but the capital they're bringing in is certainly decoupled from local salaries. And I found one study from CMHC where they found that of the domestic purchases of SFH in Burnaby and Richmond in 2018, something like 80% were by immigrants. (For the life of me I can't find it again, though.)
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Nov 9, 2021 00:40
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jettisonedstuff posted:At current rates with a 25 year mortgage the monthly payments for a $1m with 5% down is a bit below $3,500. $3k/month in rental income would more than cover condo fees, interest and taxes, and the extra amount the owner pays to top it off is all going into equity, even if the price stays where it is for a few decades. "slowly creeping towards $3K" isn't quite $3K per se. Let's throw some rough estimates together. Rental income $2,500* Income tax (~20%): -$500** Condo fees: -$500*** Maintenance: -$500**** Property tax: -$250 Mortage: -$3,500 * Sure it might be a bit higher than this, but it is also entirely possible there will be times when the apartment is unoccupied. ** Paying as a private individual; rough estimate. *** Yes this is higher than the average strata fee, but the average strata tends to put off maintenance until everyone pays in a special assessment of $10K or so. This tries to factor that in. **** Technically more by the "1% rule of thumb", but since condo maintenance is split between the owner and the strata via fees, I'm deducting the condo fees from this. Net monthly cost to the investor: $2,750 Over a 25-year mortgage, that means paying in $825,000 to get a $1M property. So I guess it still makes sense, if you have nearly $3K/month in disposable income lying around.
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Nov 9, 2021 00:58
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Lead out in cuffs posted:if you have nearly $3K/month in disposable income lying around. …across the 3 orthodontists who made a property investment group.
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Nov 9, 2021 01:11
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Look at you amateurs, caring about income and poo poo! You'll never make it in venture capital!
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Nov 9, 2021 01:21
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Hell, VCs have ways to structure their companies so that they take their salaries as dividends. No income on these guys!
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Nov 9, 2021 02:04
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Lead out in cuffs posted:So re: foreign buyers, one particular issue is people who came to Canada via the investor immigrant program, and are now citizens, but whose income still comes entirely from overseas. Those aren't "foreign" buyers under the speculation tax, but the capital they're bringing in is certainly decoupled from local salaries. Why does foreign ownership automatically mean higher prices?
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Nov 9, 2021 04:20
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jettisonedstuff posted:Why does foreign ownership automatically mean higher prices? Higher demand for housing in the metro area. Local demand + external demand > local demand.
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Nov 9, 2021 04:46
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It's one of two ways capital is injected into the market. The other being dovish monetary policy that leads to greater bank lending and higher salaries lmaooooooooooooo
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Nov 9, 2021 04:49
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We thought we were fighting them, but actually we were fighting ourselves
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Nov 9, 2021 05:01
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Lead out in cuffs posted:Over a 25-year mortgage, that means paying in $825,000 to get a $1M property. So I guess it still makes sense, if you have nearly $3K/month in disposable income lying around. Yeah it might be worth it if you ignore the time value of money, the risk of special assessments, and the risk that a 25 year old shoebox isn't worth a million dollars in 25 years.
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Nov 9, 2021 13:33
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evilpicard posted:Yeah it might be worth it if you ignore the time value of money, the risk of special assessments, and the risk that a 25 year old shoebox isn't worth a million dollars in 25 years. That's kind of what I was aiming at. When you're in a highly negative monthly return you have to be banking on the continuing huge growth in housing prices to make it at all a logical 'investment'. Obviously it's working because everyone caught up in this machine HAS to make it continue at all costs otherwise they're done. Housing as a basic need was a lost cause as soon as we did indeed get the 'group of 3 orthodontists' finding it reasonable to start speculating on housing. We're well into the shoe shine boy giving stock tips phase of the housing market, who knows where it ends.
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Nov 9, 2021 14:39
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Lead out in cuffs posted:So re: foreign buyers, one particular issue is people who came to Canada via the investor immigrant program, and are now citizens, but whose income still comes entirely from overseas. Those aren't "foreign" buyers under the speculation tax, but the capital they're bringing in is certainly decoupled from local salaries. YEP. A big chunk of that sinister ~foreign buyer~ money was in fact rich Chinese folks moving here and staying here. Turns out that life under a totalitarian regime in an ecological hell hole sucks and if you've earned a good pile of money and have an ability to get out that's pretty appealing. Now we can close some of the loopholes like the Quebec Investor Immigrant Program, but bottom line is we have a lot of people coming here and staying here. It was well worth implementing the Speculation Tax and closing the door on the minority that were simply buying pied a terres, and forcing developers to stop building luxury condos that catered to this group, but abundantly clear at this point that that group of wealthy foreigners was relatively small and weren't market movers. This was a problem, but not the problem.
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Nov 9, 2021 19:24
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Femtosecond posted:It was well worth implementing the Speculation Tax and closing the door on the minority that were simply buying pied a terres, and forcing developers to stop building luxury condos that catered to this group, but abundantly clear at this point that that group of wealthy foreigners was relatively small and weren't market movers. This was a problem, but not the problem. The problem is that housing prices are no down only up. It's the natural extension of the consumer debt crisis that is silently eating away at everyone's security. Because house prices going down would cause basically all current owners to be in the hole and that would result in basically everyone in power getting tossed out. Housing is the biggest speculation people are forced to make. And frankly housing policy is forced to be very terrible because nimby.
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Nov 9, 2021 20:21
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i think it's actually really simple: 1. people are insecure about being without housing 2. a decade of ridiculous home price growth 3. no end in sight for basically free money those plus the ratcheting of prices you can get when home owners borrow against their rapidly appreciating asset to bid up additional rapidly appreciating assets (for their kids, mostly) means housing prices are just gonna continue to soar until something changes or until like 95% of the country's gdp is housing it's ridiculous that the best return on investment is housing despite a ludicrously hot equities market
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Nov 10, 2021 05:49
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the talent deficit posted:it's ridiculous that the best return on investment is housing despite a ludicrously hot equities market It's not even clear that this is true, though. I was looking at a house in the neighborhood that sold for $200,000 in 2003, and $800,000 a few months ago. I actually did the math, and if I'd put $200,000 into the S&P 500 on the date of the earlier sale, not touched it, and taken it out on the date of the most recent sale, I'd have almost $900,000. And there are no carrying costs for ETFs. If you pull the right lottery ticket, sure, you might beat equities, but that's gambling, not investing.
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Nov 10, 2021 14:35
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tagesschau posted:It's not even clear that this is true, though. I was looking at a house in the neighborhood that sold for $200,000 in 2003, and $800,000 a few months ago. I actually did the math, and if I'd put $200,000 into the S&P 500 on the date of the earlier sale, not touched it, and taken it out on the date of the most recent sale, I'd have almost $900,000. And there are no carrying costs for ETFs. You'd probably have to pick a house post-2008 crash to see it but I'm not actually sure about that. I'd also note that the buyer probably didn't pay 200k in cash and would've also been able to invest, but of course the mortgage rates were not nearly as favourable back in 2003 so the profit margin there is a lot narrower. I'd also say that people get all obsessive about the growth of their 'investment' in housing, but often these people just own the one home where they live. So it seems completely irrelevant what your home is worth as you can't go live inside a pile of money. Other houses and rent go up just the same as yours. The only way this works is to sell and then move somewhere where the housing is much cheaper but even that is becoming less viable since the housing prices have shot up just as much in the 'middle of nowhere' cities.
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Nov 10, 2021 14:50
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Last election the YIMBYs were pushing for a mass rezoning of the whole city to lowrise apartments with the slogan "four floors and corner stores." At the moment Vancouver City is considering a plan to upzone Commerically zoned buildings on arterial roads from 4 floor condos to also include 6 story apartments, and more contentiously, allow 4 story apartments on the blocks immediately surrounding said arterial roads. I find it remarkable that in reaction to this City Hall 4 story apartment proposal developers are now openly saying, "oh yeah four stories, that's not actually viable." SFH valuations are now too high. https://twitter.com/rwittstock/status/1458314475434438658?s=20 gently caress man we need some sort of crash.
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Nov 10, 2021 15:50
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Is there any real consensus that if the crash does happen, that the REITs in the world won't just bully all the people (read: me) out of the market still?
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Nov 10, 2021 17:11
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Femtosecond posted:Last election the YIMBYs were pushing for a mass rezoning of the whole city to lowrise apartments with the slogan "four floors and corner stores." am I misunderstanding floor space rato? a 4 floor apartment with a few feet setback seems like it should be easy to reach 2.50, plenty of buildings like that in mount pleasant with underground parking. or does parking apply in some way I'm misunderstanding?
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Nov 10, 2021 17:31
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i am loving that the clarion call to do something about land prices is developers moaning that they can't make a profit even after getting rid of parking spots, windows, kitchens, parks, and schools
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Nov 10, 2021 17:43
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how about bunk beds and you just plug into the metaverse that way pesky irritants to profit margins, like "living standards", don't interfere with a developer business
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Nov 10, 2021 17:44
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tagesschau posted:It's not even clear that this is true, though. I was looking at a house in the neighborhood that sold for $200,000 in 2003, and $800,000 a few months ago. I actually did the math, and if I'd put $200,000 into the S&P 500 on the date of the earlier sale, not touched it, and taken it out on the date of the most recent sale, I'd have almost $900,000. And there are no carrying costs for ETFs. you can easily get 5x to 10x leverage on your housing investment. good luck getting that buying equities
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Nov 10, 2021 17:58
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the talent deficit posted:you can easily get 5x to 10x leverage on your housing investment. good luck getting that buying equities That's not a counterargument. Leverage cuts both ways, and will absolutely bury stupid people who think housing reliably goes up. Over the long term, equities have been far more reliable for making number go up.
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Nov 10, 2021 18:35
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tagesschau posted:That's not a counterargument. Leverage cuts both ways, and will absolutely bury stupid people who think housing reliably goes up. Over the long term, equities have been far more reliable for making number go up. sure. i wasn't clear. i'm not saying you should invest in housing or that it's a smart thing to do. i'm just pointing out that over the last whatever years you can do much better taking out a huge mortgage and buying the most house you can afford than you can investing in equities. again, i'm not saying that's a smart thing to do just that the returns are undeniable
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Nov 10, 2021 18:45
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the talent deficit posted:sure, but i'm just talking about the last 10 years. i'm not saying housing is always the best investment but it's undeniable that people who invested in housing in the last fiveish years have done much better than those that invested in equities tagesschau posted:that's gambling, not investing
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Nov 10, 2021 18:46
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i realize it's gambling. i'm not recommending it as an investment strategy. i am saying that seeing those kind of returns drives people to gamble which just puts more upwards pressure on the whole system
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Nov 10, 2021 18:47
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MickeyFinn posted:Higher demand for housing in the metro area. Local demand + external demand > local demand. Right, but unless the foreign owners of the property are leaving it empty it doesn't actually reduce the housing stock. They'll just rent it out and someone can live there.
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Nov 10, 2021 19:09
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jettisonedstuff posted:Right, but unless the foreign owners of the property are leaving it empty it doesn't actually reduce the housing stock. They'll just rent it out and someone can live there. I had to look up what you asked originally, so here it is to provide some context for my answer: You asked why foreign buyers are assumed to raise prices. The argument is that there are more prospective buyers for a finite number of houses, so prices should rise. The foreign buyer renting the property out only reduces demand for buying if the person living in that rental would have otherwise purchased a property, but isn’t now because they have a place to live. Put another way, foreign property owners do reduce the housing stock for buying if renting and owning are not seen as substitutes by most market participants. I think it’s pretty clear they are not viewed as substitutes, even if there is an economic argument for when to rent versus buy.
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Nov 10, 2021 19:55
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tagesschau posted:That's not a counterargument. Leverage cuts both ways, and will absolutely bury stupid people who think housing reliably goes up. Over the long term, equities have been far more reliable for making number go up. You don’t get margin called on housing. This only happens if you stop paying your mortgage.
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Nov 10, 2021 20:09
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qhat posted:You don’t get margin called on housing. This only happens if you stop paying your mortgage. In what universe will the bank renew your mortgage for another term if the collateral drops in value and makes your loan-to-value ratio too high? That's effectively a margin call. Also, if you're constantly at risk of a margin call in your investment account, you're stock-picking instead of investing in something diversified (which, I will point out, your house is the opposite of). In that case, I'll just tap the sign again: tagesschau posted:that's gambling, not investing
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Nov 10, 2021 20:38
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Did I ever mention you have really bad takes in general?
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Nov 10, 2021 21:04
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qhat posted:Did I ever mention you have really bad takes in general? Coming from you, that's as good as proof that I don't, especially since you don't have any actual criticism to offer.
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Nov 10, 2021 21:05
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I forgot I was responding to the guy who argued for 3 pages that Canada's lack of inheritance taxes wasn't at all contributing to high home prices. But if I must; No, that is not even close to the same thing as a margin call. Margin calls in an investment account often are instantaneous and happen without warning, and if you have a kind brokerage (you don't) you generally have max until the end of the day to post collateral, or else you are hosed. There is often very little recourse to something like that, you could get an alternative lender, but obviously that debt wouldn't be secured, so it's basically pointless. Also the original point was that you can obtain 5-10x leverage on housing for a significantly lower risk of being called. Please show me an investment account that offers more than 70% than the value of your collateral on margin? This is a rhetorical question, obviously, because that kind of margin is federally illegal. But you already know all of this and you're being deliberately obtuse in suggesting mortgage renewal and margin calls are the same thing. All being said, I don't really have any intention of having another 3 page argument with you about something which is frankly so obvious that it's shocking it even has to be explained.
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Nov 10, 2021 21:35
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qhat posted:I forgot I was responding to the guy who argued for 3 pages that Canada's lack of inheritance taxes wasn't at all contributing to high home prices. And you dug in with the unsupported position that assets that aren't taxed enough are responsible for high house prices in Canada, when it's entirely due to lax lending practices that permit non-wealthy Canadians to borrow more than their income would indicate, and the apparent political will to upend the entire economy to prevent a particular number from going down. Dropping the estate tax threshold so low that you hit the average Toronto homeowner, who is not actually obscenely wealthy, won't do anything but piss people off and ensure that they vote against whatever party implements such an objectively stupid plan. qhat posted:No, that is not even close to the same thing as a margin call. In the context of a mortgage, it's as close as you can get, and just as able to force the quick sale of the asset in question, so you're wrong again here. Canadians seem to think that mortgages up here are like American mortgages, where the loan-to-value ratio matters only at closing and renewal isn't a thing. qhat posted:I don't really have any intention of having another 3 page argument with you about something which is frankly so obvious that it's shocking it even has to be explained. I'm shocked, too, but I've explained it for you above.
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Nov 10, 2021 21:50
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Thanks for not responding to anything in my post that actually explained why they were not the same thing at all. This makes it easier on me.
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Nov 10, 2021 21:53
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qhat posted:Thanks for not responding to anything in my post that actually explained why they were not the same thing at all. This makes it easier on me. Again, since you missed it, about the house dropping below the outstanding balance of the mortgage: tagesschau posted:In the context of a mortgage, it's as close as you can get, and just as able to force the quick sale of the asset in question, so you're wrong again here. If you think that being upside down on your mortgage at renewal time puts you at no risk of suddenly having to find a way to pay off the whole thing, all I can advise you is not to try it. This is, again, straying from my original point about the reality that equities have historically been a much safer long-term investment than housing. An asset that pays you dividends and experiences near-constant capital gains is a better-performing asset than one that tracks inflation and costs money to own. "You sure can borrow a lot to buy the underperforming asset" doesn't change the calculus here.
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Nov 10, 2021 22:02
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I would honestly love to see a bank foreclose on an underwater mortgage from a credit worthy borrower just because the LTV has increased. That would be an unbelievably stupid decision on the bank's part.
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Nov 10, 2021 23:28
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