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ocrumsprug posted:Not to disparage public employees, but what exactly does a market analyst do for the CMHC anyways? In my experience CMHC 'analysts' are all koolaid-drinking shills with absolutely no conception that maybe the market may be a little hinky.
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Oct 23, 2013 23:49
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PT6A posted:This is because a lot of the most expensive things in any apartment or house exist in basically the same form whether it's a tiny bachelor or a huge house. My intuition is that the kitchen is far and away the most expensive room in any dwelling, and there's only ever one of those in 99% of dwellings. Even if there's a separate wet bar or something, it probably won't have a range and a dishwasher and whatnot. Space itself is not terribly expensive in comparison. "Space" in an apartment building can be pretty drat expensive. Typically a high-rise apartment building base structure will cost something like $120 to $130 per square foot of floor area to build, with an addition $5 per square foot if there is an elevator and maybe $10 per square foot for site preparation and improvements. The cost of everything above the base structure in the apartments (IE. plumbing, HVAC, interior partitioning, floor cover, cabnitry and shelving, entrance / lobby) is maybe $35 to $50 extra per square foot depending on quality. Adjust those figures for the cost of materials and labour, and add the cost to acquire the land on top and whatever entrepreneurial profit (typically 15-20% of all hard costs associated with the property) for the developer. The savings you might get for having a few less kitchens or washrooms in the building because your units have higher room counts is pretty insignificant compared to the whole. Lexicon has it right, you can actually observe "economies of scale" in the market for any type of property - typically the larger in size a property is, the less potential purchasers there are that can make maximum use of the area so the price per square foot drops. Starsfan fucked around with this message at 01:38 on Oct 24, 2013 |
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Oct 24, 2013 01:34
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You know why vancouver 's market will always stay high? Because everyone wants to move here. There's a limitless supply of rich mainland Chinese who http://m.us.wsj.com/articles/BL-MBB-10543
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Oct 24, 2013 01:57
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Cultural Imperial posted:You know why vancouver 's market will always stay high? Because everyone wants to move here. There's a limitless supply of rich mainland Chinese who wasn't the rich foreigner driving up the market explanation shown to not line up with actual stats?
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Oct 24, 2013 17:39
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etalian posted:wasn't the rich foreigner driving up the market explanation shown to not line up with actual stats? Yeah there's only something like less than 2% of properties in Vancouver being bought by foreigners.
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Oct 24, 2013 17:52
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etalian posted:wasn't the rich foreigner driving up the market explanation shown to not line up with actual stats? Apparently the narrative that rich foreigners are purchasing everything with suitcases full of cash, shows some weaknesses when you see how much of their insurance cap the CHMC has dedicated to the west coast.
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Oct 24, 2013 17:57
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ocrumsprug posted:Apparently the narrative that rich foreigners are purchasing everything with suitcases full of cash, shows some weaknesses when you see how much of their insurance cap the CHMC has dedicated to the west coast. Yeah if it was all about rich foreigners buying up everything with cash purchases there wouldn't be such a need for the CHMC to underwrite so much risk.
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Oct 24, 2013 18:12
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etalian posted:wasn't the rich foreigner driving up the market explanation shown to not line up with actual stats? Rich foreigners drive the market in the sense that delusional Vancouverites are fearful [of their spectre] and boastful [about how they all want to live there] in equal measure.
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Oct 24, 2013 18:19
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A family friend bought a house a few years ago in Richmond and one of her reasons for buying before she had 20% down was "I gotta buy before the chinese buy them all!". Fears of rich asians: ensuring the strength of our real estate economy! Maybe the CMHA could add that to their list of fears that will keep our markets on the up ad up. Interest rates and asians.
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Oct 24, 2013 18:22
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HookShot posted:Yeah there's only something like less than 2% of properties in Vancouver being bought by foreigners. If I recall -- Only 2% of the property tax mailings were being sent to overseas addresses, and drawing a conclusion from that. This is likely underreporting the rate of foreigners buying. For example: I no longer live in Vancouver. The property tax bills for my two properties go to my lawyer -- who has a Vancouver address. I suspect it is far higher than 2%, but nowhere near as high as Vancouverites think it is.
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Oct 24, 2013 18:24
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Would he blend in well at Vancouver?
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Oct 24, 2013 18:33
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Oh it's, Boltar! I'd pay upwards of 4k a month to live in his place.
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Oct 24, 2013 19:26
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The bigger problem is Canada doesn't keep track on foreign buyers as much other countries which means it really tough to find public data which could yield meaningful numbers. So instead you get lots of articles on real estate hearsay or using one condo building to define the whole macro behavior of the market. On another the piles of new condos is probably the best way to see the bubble keep on increasing, it shows easy credit and hence a lack of interest in building the less profitable apartment rental properties. etalian fucked around with this message at 20:51 on Oct 24, 2013 |
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Oct 24, 2013 20:47
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http://www.theglobeandmail.com/report-on-business/bank-of-canada-rate-stance-could-have-adverse-effect-on-housing-market/article15032903/ Boc might hike interest rates in the future.
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Oct 24, 2013 21:52
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etalian posted:wasn't the rich foreigner driving up the market explanation shown to not line up with actual stats? Yeah, that was just my failed attempt at being funny.
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Oct 24, 2013 21:53
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Cultural Imperial posted:Yeah, that was just my failed attempt at being funny. I guess the whole rich foreigners explanation just serves as useful deflection from the main problems? It's not our fault housing is getting so unaffordable due to bad domestic policy, it's because rich asians are buying up the whole neighborhood.
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Oct 24, 2013 22:21
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It would be nice if Canada actually collected better data more thoroughly about a lot of things. But thanks to the non-evidence based decision making of the government this is unlikely to happen. So enjoy the heresay and speculation from unregulated and self-regulated markets.Cultural Imperial posted:http://www.theglobeandmail.com/report-on-business/bank-of-canada-rate-stance-could-have-adverse-effect-on-housing-market/article15032903/
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Oct 24, 2013 23:23
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Cultural Imperial posted:http://www.theglobeandmail.com/report-on-business/bank-of-canada-rate-stance-could-have-adverse-effect-on-housing-market/article15032903/ Argh, this isn't/shouldn't be a BoC issue. This should stay a CMHC issue. Using a low central bank rate as an excuse for cheap/irresponsible consumer credit is exactly that: an excuse. I don't get why they themselves are framing it in those terms.
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Oct 24, 2013 23:31
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Mr. Wynand posted:Argh, this isn't/shouldn't be a BoC issue. This should stay a CMHC issue. Using a low central bank rate as an excuse for cheap/irresponsible consumer credit is exactly that: an excuse. I don't get why they themselves are framing it in those terms. Totally agreed. Central bankers aren't supposed to set rates to keep your monthly mortgage payments and credit card payments afoordable.
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Oct 24, 2013 23:57
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http://m.theglobeandmail.com/report...rvice=mobile#!/ I'm on a phone so quoting is impossible. Check out CAAMP's Jim Murphy's statement: if you slow the pace of housing, what's going to take its place in terms of the domestic economy So finally, someone in the FIRE industry gets it.
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Oct 25, 2013 02:45
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PT6A posted:This is because a lot of the most expensive things in any apartment or house exist in basically the same form whether it's a tiny bachelor or a huge house. My intuition is that the kitchen is far and away the most expensive room in any dwelling, and there's only ever one of those in 99% of dwellings. Even if there's a separate wet bar or something, it probably won't have a range and a dishwasher and whatnot. Space itself is not terribly expensive in comparison. This is pretty clearly wrong since sale prices scale pretty much linearly with square footage in e.g. condos, and a much better explanation is: Lexicon posted:I posit that it's nothing to do with the relative expense of dwelling size, and everything to do with the actual market of people willing to pay $X for rent at a given price tier. This is also why the rental price/sale price ratio in Vancouver is so high compared to other places with expensive real estate in North America (because salaries in Vancouver are utter garbage).
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Oct 25, 2013 10:15
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blah_blah posted:This is pretty clearly wrong since sale prices scale pretty much linearly with square footage in e.g. condos, and a much better explanation is: Yeah it's quite a eye opener in the RBC charts showing affordability in Vancouver for things such as single family home or even condo as being 40-80% of the median monthly salary. Even the "reasonable" condo number is still far away from the recommended rule of thumb to spend only 25% to 30% of income on housing related expenses.
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Oct 25, 2013 14:59
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Is that post or pretax income used to calculate the 25 to 30%?
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Oct 25, 2013 15:27
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mastershakeman posted:Is that post or pretax income used to calculate the 25 to 30%? Pre-tax. Its lower in Canada because of our lack of mortgage deductibility, so bear that in mind.
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Oct 25, 2013 16:06
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Tangent - but why the gently caress is "pre tax income" such a commonly used metric? People can instantly quote their salary in "pre tax dollars" but rarely, in my opinion, can tell you what their yearly take is net of taxes. Same with affordability questions - why should anyone care about pre-tax dollars? This makes no sense to me. Surely the only relevant measure is a person's take-home pay?
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Oct 25, 2013 16:25
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Lexicon posted:Tangent - but why the gently caress is "pre tax income" such a commonly used metric? People can instantly quote their salary in "pre tax dollars" but rarely, in my opinion, can tell you what their yearly take is net of taxes. Same with affordability questions - why should anyone care about pre-tax dollars? This makes no sense to me. Surely the only relevant measure is a person's take-home pay? I was talking about this with someone today, and it's largely because people are too lazy to figure out how much they're actually being taxed, and partly because it's the mentality that taxes are something you always pay next year, with next year's paycheque (ignoring deductions). It's short sighted, but it's psychological: it's a lot easier to talk about your $60k/year job than the $30k you take home. It also tends to justify spending beyond your means.
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Oct 25, 2013 17:15
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Dreylad posted:I was talking about this with someone today, and it's largely because people are too lazy to figure out how much they're actually being taxed, and partly because it's the mentality that taxes are something you always pay next year, with next year's paycheque (ignoring deductions). It's short sighted, but it's psychological: it's a lot easier to talk about your $60k/year job than the $30k you take home. It also tends to justify spending beyond your means. Knowing how much I will physically have in my bank account is reassuring.
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Oct 25, 2013 18:15
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Lexicon posted:Tangent - but why the gently caress is "pre tax income" such a commonly used metric? People can instantly quote their salary in "pre tax dollars" but rarely, in my opinion, can tell you what their yearly take is net of taxes. Same with affordability questions - why should anyone care about pre-tax dollars? This makes no sense to me. Surely the only relevant measure is a person's take-home pay? During the boom (in the US) you were allowed a DTI of up to 50% (60% in some cases). Mainly because it's easy (for the banks) to conservatively estimate (and also verify) what someones take home pay is from that and everyone knows their gross- if you ask them for their net they might make a mistake, or lie, or whatever.
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Oct 25, 2013 19:17
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I guess the best rule of thumb for a bubble, is if it's nothing but glittery condos for new urban housing supply it's a nice real estate bubble. I remember reading that for the fancier parts of Vancouver new housing starts were 65% just for condos.
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Oct 25, 2013 20:41
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etalian posted:I guess the best rule of thumb for a bubble, is if it's nothing but glittery condos for new urban housing supply it's a nice real estate bubble. As opposed to what, single family homes downtown?
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Oct 25, 2013 20:43
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Baronjutter posted:As opposed to what, single family homes downtown? plain boring rental properties
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Oct 25, 2013 20:46
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Surely if rental prices and construction aren't even close to matching condo prices and construction that just means everyone's wealthy and smart enough to understand the advantages of the pride of ownership.
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Oct 25, 2013 20:55
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Baronjutter posted:Surely if rental prices and construction aren't even close to matching condo prices and construction that just means everyone's wealthy and smart enough to understand the advantages of the pride of ownership. If you rent you are just throwing money away instead of giving it to the bank or your real estate agent.
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Oct 25, 2013 20:56
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I look forward to an economy based on nothing but condo speculation, realtor fees, and banks.
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Oct 25, 2013 20:57
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Baronjutter posted:I look forward to an economy based on nothing but condo speculation, realtor fees, and banks. You look forward? It's here.
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Oct 25, 2013 21:03
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Yeah it is seriously the only source of "growth" in the GVRD now. Literally the only thing holding the local economy up. That's why a bubble burst only sounds nice on the surface even for us bears - in reality it's going to hurt and it's going to hurt a lot.
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Oct 25, 2013 21:15
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Mr. Wynand posted:Yeah it is seriously the only source of "growth" in the GVRD now. Literally the only thing holding the local economy up. That's why a bubble burst only sounds nice on the surface even for us bears - in reality it's going to hurt and it's going to hurt a lot. Actually this will save the local economy: http://www.cbc.ca/news/business/world-s-first-bitcoin-atm-goes-live-in-vancouver-next-week-1.2251820
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Oct 25, 2013 21:16
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etalian posted:Actually this will save the local economy: So... is it not just me and Vancouver is actually becoming an idiocy hot-spot of sorts for Bitcoins? Because a lot of my, well I would hesitate to call them friends, but let's say acquaintances, either work for a Bitcoin related company or own/mine Bitcoins themselves or have at least been approached by Bitcoin startups. I assumed this is just because I tend to run in a lot of turbonerd circles, but seeing this sort of stuff worries me. If this seriously becomes Vancouver's "thing" other than real estate I think... I think I'll just give up. A man has limits.
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Oct 25, 2013 21:21
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Mr. Wynand posted:So... is it not just me and Vancouver is actually becoming an idiocy hot-spot of sorts for Bitcoins? Because a lot of my, well I would hesitate to call them friends, but let's say Acquaintances either work for a Bitcoin related company or own/mine Bitcoins themselves or have at least been approached by Bitcoin startups. I assumed this is just because I tend to run in a lot of turbonerd circles, but seeins this sort of stuff worries me. Well it's match made in heaven given the irrational exuberance, can only get higher mindset and bad economics in both bitcoins and real estate market.
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Oct 25, 2013 21:22
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Mr. Wynand posted:Yeah it is seriously the only source of "growth" in the GVRD now. Literally the only thing holding the local economy up. That's why a bubble burst only sounds nice on the surface even for us bears - in reality it's going to hurt and it's going to hurt a lot. I used to hold this line of thinking but seriously, everyone who's posted in this thread is orders of magnitude more financially responsible than all the speculative greedy assholes out there. We're all going to do fine. Just don't invest in Canada until all those 30 thousandaires have finally received their comeuppance.
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Oct 26, 2013 02:07
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