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A funny anecdote: when I was at the Vancouver real estate board, they did this thing where they would fundraise for the office Christmas party throughout the year, usually by selling bingo and 50/50 cards and the like, with the proceeds going into the party fund. However, they would always have to time the games to happen on the day after payday, because otherwise nobody would have $2 to spare on a raffle due to being broke.  So in terms of that whole "spend every dime you have every month and never save any of it and max out your allowable mortgage SPEND SPEND SPEND!" mentality, the real estate board staff certainly practiced what they preach...
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Mar 20, 2013 00:52
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Cultural Imperial posted:Did you ever meet a talking head like Cam Muir or Tsur Sommerville? And what was your impression of them? Yeah, I met both, though Muir only briefly. Tsur seemed like your prototypical know-it-all academic, full of himself and given to smug pronouncements (with zero data to back it up) and snappy quips. Basically, his media persona took over the host body. The real estate boards all hate him because he'll occasionally go off the script and say something they don't like, whereupon the board will phone up his boss at Sauder and ream him out and remind them how much money the developers pay to keep them in smoking jackets. Then Somerville calls the board and grovels and apologises. You know, academic independence. Cameron Muir is a real treat. He's not actually an economist, which is why his understudy/assistant is always an actual trained economist, so that somebody knows how to do all the modeling for him. He also tends to piss off the Vancouver area boards with his being both useless AND smug, which is never a winning combination. I dealt more with his coworkers, and they all seemed to harbour a silent dislike of him. The worst one of the lot is Helmut Pastrick, who despite being the chief economist for Credit 1 Central and therefore should know better, truly believes the hype and thinks things will remain hunky dorey forever and ever. I was pretty much the only analytical type person at the board in any capacity who was a bear.
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Mar 20, 2013 02:00
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Rime posted:Why am I not surprised that the Real Estate Board holds meetings at the Pumpjack. Well, Celebrities is wretched these days...
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Mar 20, 2013 02:47
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Throatwarbler posted:Seriouspost: My mom really likes Victoria and wants to buy a house and retire there. She isn't going to start seriously looking until the latter half of this year at least though. Yes/No? Spring 2015 is my best guess based on how the US bubbles unfolded.
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Mar 20, 2013 03:32
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Sovy Kurosei posted:How much influence does the government have on the Bank of Canada to increase interest rates? Zero. The Bank of Canada is politically insulated by design, and any perceived change in that would lead to a poo poo tsunami of epic proportions.
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Mar 21, 2013 00:39
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Throatwarbler posted:The low-rise owners weren't evicted at gunpoint, they got paid more than what they figure the property was worth to them. That money didn't just dissapear into a hole in the ground, the total amount of "stuff" (apartments and cash) in the economy has increased. If lovely 1970s low-rise apartment buildings were such a lucrative proposition they can build another one somewhere else. Hey cool, a post that perfectly encapsulates why I mostly avoid this thread. Quick question- are you familiar with the capital gains taxation issue on rental property?
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Mar 21, 2013 15:07
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Trapick posted:Do you mean the fact that you're taxed on any capital gains from it, just like any other capital asset whose increase in value you realize (excluding a primary residence)? What's the problem with that specifically? Well, first off, it was a question directed at a statement that included this line: "If lovely 1970s low-rise apartment buildings were such a lucrative proposition they can build another one somewhere else." Since anybody who has been paying the LEAST bit of attention to the housing situation in Canada in general (and Vancouver in particular) knows that the steady decline in purpose-built rental stock is a serious problem, it seemed strange to me that somebody would say something that obviously wrong on the subject. So I asked literally the first question that comes to mind in terms of seeing if somebody knows what the complexities involved in this topic are- do you know about the taxation issue? Since that's basically Point #1 any time the rental apartment owners and managers' association goes a-lobbyin', it seemed like low hanging fruit to see if this conversation is even possible or worth having. Now, to answer your loaded question about whether or not I think wealthy fatcat landowners should be forced to pay taxes, John Galt be praised, the issue at hand has been well-known since the change was made in the 70's under Trudeau. The old model was, if you sold an "investment" property, which any PBR building qualifies as, you could avoid capital gains taxation as long as you took that money and reinvested it in new PBR stock somewhere else. This allowed owners of older, dilapidated buildings who couldn't afford to self-finance redevelopment to sell out to an investor, no matter what crazytown things the property market had done, and then go and buy something elsewhere to resume doing their thing, aka "build another one somewhere else". It worked because it didn't lock people into becoming reluctant slumlords, and ensured that new rental stock was added, and that old stuff was updated. With the change, however, it's pretty obvious to see what's happened in placed like Vancouver, where low-density apartment buildings on prime real estate are literally everywhere, from South Granville to the West End and points in between. The owners of these buildings can't afford to refurbish them, and can't cash out because they'd lose a ton of their equity, which would prevent them from reinvesting somewhere else similar. That means that when one of these buildings DOES finally sell out, it does so to condo developers or predatory assholes with deep pockets like Gordon-Nelson. Now by all means I'm less sympathetic to this particular complaint than the owners' and managers' association would like, because I think a big part of the problem at play is the issue of cheap and lovely builders wanting to cut corners on construction and then fob the problem off to the new strata, but to pretend like the capital gains issue isn't at least something of an issue is... myopic, we'll call it. The lack of a national housing strategy in Canada is a disgrace, and this is just one symptom.
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Mar 21, 2013 17:01
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Baronjutter posted:Yes, sometimes the government uses taxes to steer the economy. Hey now, I'm sure that my detailed effortpost explaining why redirecting capital investment into purpose-built rental housing for low income people could be useful is actually somehow secretly a Galtian crie de coeur, cut the dude some slack.
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Mar 21, 2013 18:15
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JawKnee posted:Nobody is saying that *clicks Rap Sheet* *nods sagely* Edit for content: the graphic from that article Cultural Imperial linked above is pretty interesting: 
Franks Happy Place fucked around with this message at 18:28 on Mar 21, 2013 |
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Mar 21, 2013 18:26
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Baronjutter posted:The Janion Hotel alone could have its own thread... holy poo poo. Yeah, the point here was less "Boo taxes unfair!" and more to point out that there are a LOT of moving parts involved in housing. Which is why we need a national housing strategy.
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Mar 21, 2013 20:14
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Cultural Imperial posted:Fineable Offence, did the rebgv ever study the impact of No. And by that I mean "put anything after that sentence fragment and the answer is still no", because they didn't research ANYTHING.
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Mar 21, 2013 22:26
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Cultural Imperial posted:oh dear... I once told my boss we should pitch a multi-party research project to the Feds and banks to assess the level of foreign investment actually present in the marketplace, and the conversation went something like this: Boss: "Why would we do that?" Me: "...because it's the #1 hot button issue right now in real estate, and if some level of government decides to set policy on bad information, it could have a negative impact on our members?" Boss: "I just don't see the point.  "Basically, there just aren't a lot of smart people at the board, and none of them are analytically inclined. Mr. Wynand posted:Wynand's n-point housing strategy plan: Pro post, though I'd add: -Institute a real loving building code -Actually inspect/enforce said building code. True story: the head building inspector for the City of Burnaby once told a co-worker of mine that they "don't actually go in to inspect buildings anymore, we just sign the permit sight unseen". When asked why this was the case, he said it was because their legal department had told them it would protect them in the event that an inspector missed something and the city got sued. Somebody from the City of North Van (iirc, it may have been the District) chimed in to say that their legal people had told them the same. Franks Happy Place fucked around with this message at 22:42 on Mar 21, 2013 |
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Mar 21, 2013 22:38
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Dreylad posted:Does rent control figure into a sustainable housing strategy plan, or is that sort of a band-aid on a gushing wound? Rent control just creates more market distortion, which is what got us into this mess in the first place via the CMHC. I'd rather social housing be taken care of through some kind of monthly credit/voucher/whatever that people below the poverty line can use to supplement their income to access market housing, with actual social housing being reserved for people who are legitimately in need of it. That, combined with a renewed, robust strategy of supporting co-ops, should take care of the 'working poor' and lower middle class types, with minimal cost to the government. Definitely anything but the current model of density bonusing in return for a few token non-market units from the developer, though. That poo poo is so stupid and futile it boggles my mind how long we've let it go on.
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Mar 21, 2013 23:27
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Mr. Wynand posted:I wonder if this is related to the fact that my current building clearly doesn't have enough elevators for how many floors it has (i'm guessing you work around a city hall? would you happen to know if that is actually in a code?), and that only a single door from the fire escape stairs actually opens from the inside and if the fire happens to be near that door, I guess we can all just burn alive safe from thieves? You want page 34, I think. Also, I don't work for city hall, I work for a provincial crown corporation now.
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Mar 21, 2013 23:35
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Rent control in it's current form in B.C. also doesn't actually really impact rents, because you can raise rents once a tenant leaves, and last I saw the stats the average length of tenancy in B.C. was sub-2 years. The fact that rents basically track to income growth and/or inflation is because the market still almost-kinda works. At the rate we're losing stock, though, that won't last much longer. Pretty much the only thing that's kept it in check is the number of retarded speculators buying condos and then renting them at a massive loss.
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Mar 21, 2013 23:39
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Mr. Wynand posted:Doesn't work like that. I'm not entirely sure what you are talking about, but none of your post addressed what I was talking about, which is the fact that most people move out of their apartments on a voluntary basis often enough that the aggregate impact of rent control is negligible.
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Mar 22, 2013 00:10
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Cultural Imperial posted:So we should just let road infrastructure fall apart so we can realize your urban hipster utopia? Please, please, stop with these loving shitposts. You throw more ad hominems around than a Gordon Ramsay marathon.
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Mar 22, 2013 00:22
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Cultural Imperial posted:Economically, how is a podunk city of 1.2 million supposed to support this sort of infrastructure? Here are some comparable examples for us to consider.
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Mar 22, 2013 00:48
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Cultural Imperial posted:It strikes me as incredibly callous that your solution to building a sustainable city is to punish everyone in the fraser valley with a 3 hour commute. Please explain how improving mass transit from the exurbs to the downtown core will increase commutes.
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Mar 22, 2013 00:52
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Cultural Imperial posted:I don't know what your point is. Aucklund, Adelaide and Perth have equivalent populations to Vancouver and transit systems which have equivalent daily riderships to the Skytrain. The point is that commuter rail (rather than urban transport which is what Skytrain is) can be an excellent way to bring people in from the suburbs, even in lower-density cities similar to Vancouver.
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Mar 22, 2013 01:02
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Throatwarbler posted:Oh good more well considered government affordable housing initiatives that this thread has been calling for. You keep saying these things, but [citation needed].
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Mar 22, 2013 05:58
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Grand Theft Autobot posted:Yeah, I saw a median household income of $70k on the google. $635k is a ton of money. Let me guess, it is a crack shack. It probably looks really nice from the outside, and in a year they will be on Mike Holmes' show talking about how the previous owner plastered over a foundation made of old Q-tips.
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Mar 28, 2013 01:13
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ocrumsprug posted:If you exclude economic racism, can you provide one reason why this fact is a given in this conversation. How do you know it? Foreigners are de facto non-residents with no valid visa, meaning they can only use their properties a brief percentage of the year (depending on what their visa class is; the highest it could would be 50%). They also don't need to purchase property (if they want to visit, they can rent or get a hotel or whatever), so it's not like we're stripping them of some important right they are entitled to. Beyond that is also the fact that foreigners are given less rights and privileges while visiting Canada than legal residents are anyway, so they are below legal residents on the social-resource pecking order. Since any purchase of property by a non-resident inherently removes a limited social resource from the pool and bids up the price for the remaining resources for locals, you are essentially privileging the rights of the international 1% over poor locals. It's the same reason we don't give nonresident foreigners access to our free healthcare system, or other limited social resources. This is not a difficult point to grasp.
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Apr 8, 2013 16:55
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Lexicon posted:Personally, I reckon it's a mild contributory factor, with the overwhelming reason being Canadians (and Americans before them, and Brits at various points in the past) who are mostly innumerate and not analytically-minded, working themselves up into a collective maniacal lather about "prices always go up!", "don't pay other people's mortgages, etc", aided by the cheerleading of the FIRE sector. Mostly self-perpetuated in other words. I agree in principle, but there is also a factual element of... poor capital controls, lack of enforcement, whatever you want to call it, that leads to dirty offshore money (and not just from China!) flooding into Canada as a cash haven. The only penalty to being caught with a suitcase full of dirty money is a tiny fine and a stern talking-to, then CBSA gives you your money back and sends you out to the River Rock Casino to help with the laundering process. Remember this incident? Do you seriously think local economic conditions created this? There's not a HELOC in Point Grey large enough to pay for that kind of extravagance. Local stupidity is largely to blame for sure, but the idea that we shouldn't be enforcing some kind of basic capital controls and tying property ownership to a valid visa etc. is just ridiculous. If it's a small contributing factor, then it won't be a big deal to anybody but the corrupt CCP officials, Russian oil mafia, and drug lords, right? Franks Happy Place fucked around with this message at 17:46 on Apr 8, 2013 |
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Apr 8, 2013 17:34
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ocrumsprug posted:I don't think I am the lazy one for expecting someone proposing foreign property restrictions to come to the table with some data to back up their claims of harm. I would like someone to know how big of a problem something is before they start enacting legislation to fix it. That is not too much to ask, and the fact that is no one can answer the question is pretty telling. What's lazy is saying this: ocrumsprug posted:I expect that most arguments made for them, continue to be thinly veiled yellow menace. (Which I believe was the entirety of my original point.) ...and then expecting anybody who disagrees with you will take your arguments in good faith. "If you disagree with me you must be a racist!" is just lovely, bad-faith posturing. For what it's worth, when I was with the REBGV, I proposed a collaborative study with CRA to track rates of foreign ownership, and it got shot down, presumably because foreign buyers were, at the time, a sweet gravy train. That said, REBGV conducts a regular poll of their members realtors, and one of the questions asked is something akin to, "Was your client a non-resident alien?" Now granted, there's an element of subjectivity to that question, but by and large I would expect a real estate agent to have a relatively decent handle on whether or not their client has a visa or not, since there are huge paperwork implications with regard to FINTRAC. So when they came back, time and again, reporting levels anywhere from 5% to 15%, I believe that there's a solid probability that around 8-10% of the activity in Vancouver in the last five to eight years was driven by hot money coming out of booming economies, especially China. Now, the real issue here is that the money coming out of China is effectively indistinguishable in our economy from the effects of Guy DeBorgore's mythical printing press. That's because of several reasons, really, but here are a few:
So, effectively unlimited amounts of money bidding up a limited resource. Shocking that prices were spurred higher, or that locals sensed a speculative buying frenzy and hopped aboard the train! Yes, there is a lot of stupid racism relating to this subject... but the establishment is making it a lot worse (and arguably the worst is yet to come) by turning a blind eye to these legitimate problems for so long. Also, for the record, I speak relatively fluent Mandarin and do a lot of eavesdropping. It's all just anecdotal, but it certainly mirrors what I see in the analytical data.
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Apr 8, 2013 18:17
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Lexicon posted:^^^ Out of curiosity Fine-able Offense, mind sharing what it is that you do for work? Sounds a bit like you're some renegade real-estate bear that's infiltrated the high-echelons of the real estate industrial complex Here's the job listing from my old position. And yes, I hated every second of it.
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Apr 8, 2013 18:35
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dethslayer666 posted:If foreign investment was inflationary Uh yeah you should probably just stop there, dude. I'll be more polite and just say "Please Google 'demand-pull inflation' before claiming that FDI has no impact on a domestic economy". Franks Happy Place fucked around with this message at 21:10 on Apr 8, 2013 |
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Apr 8, 2013 21:03
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dethslayer666 posted:What am I missing? ...the fact that the RMB is the world's most well-known fixed-rate currency? There's no appreciation?  Also, even then, appreciation doesn't account for the dislocation of capital driving up prices in certain sectors. All you need to do in Vancouver is note the level of retail vacancies or frequency of restaurant failures to see, hmm, maybe all the capital is tied up someplace... silly.
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Apr 8, 2013 21:25
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dethslayer666 posted:Even if it was fixed to one currency, it would still float relative to all other floating currencies. It's not fixed, it's not fixed to the Canadian dollar, and it sure as poo poo isn't fixed to every floating currency in the world. Canada is one of the basket currencies. God drat, dude. Also, the fact that you keep mistaking GDP-wide inflation for inflation in a specific sector is making me laugh my rear end off. They are two entirely different things; foreign currency derived asset bubbles have happened all over the world, time and again. Entire BOOKS have been written about the 1997 Asian financial crisis! Here's a little thought-puzzle to hopefully help you: if every single person on Earth decided that they needed to buy real estate in Vancouver no matter what (like, there was a terrible plague that would strike non-Vancouverites on May 1st), do you think that the price of real estate in Metro Vancouver would rise? Do you think your weird theory about hot money not having any material impact on sectoral inflation would prevent the bid-pull effect? I'm honestly curious.
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Apr 8, 2013 21:41
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SpaceMost posted:What are the meaningful differences between a $400,000 mortgage @ 10% and a $200,000 mortgage @ 5%? (pretend my examples are in equilibrium) You're looking at it backwards- the (stupid) idea was that we should relax CMHC rules to push more money out into the system, so that people could "afford" to buy homes. Of course, it just resulted in inflationary pressure as more and more money chased limited assets around. Trying to back that out in reverse in terms of what meaningful effect it would have on an individual buyer is pointless, since an individual buyer's ability to buy was never a reasonable metric to use on a macroeconomic level. Once you have a lot of hot money sloshing around in the system, it no longer becomes just a simple calculation that looks like: X (original price) + Y (inflation caused by new money) = Z (new price); ...because humans are irrational and classical economics is Dumb and Wrong. Now you're dealing with a momentum play and sentiment, because people see a specific asset class going "up" in value, as the hidden costs remain hidden. So they pull cash from other sectors (First-Time Homebuyer's Plan being a notorious example) and pile into this hot asset class; the momentum begets momentum, because it's a "can't-lose proposition". You draw in more and more marginal buyers, until you're at a historically-abnormal ownership percentage, mostly caused by people buying something they normally wouldn't, because they think they are making money on the speculative aspect. So now the new calculation is: X (original price) + Y (inflation caused by new money) + (speculation from marginal buyers) = Z-squared (new price);Et voila, an asset bubble. Three men are on a desert island. Two of them each have one dollar; the third has a spare coconut. Since both guys want to buy the coconut and each only have a dollar, the coconut is worth one dollar (plus a handjob or whatever they can use to sweeten the deal). One day, each of the two dollar-holders independently comes across a suitcase stuffed with cash, and now each of them has $1,000,001 dollars. Coincidentally, guess what? The coconut is now worth $1,000,001 dollars, too. Franks Happy Place fucked around with this message at 17:38 on Apr 9, 2013 |
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Apr 9, 2013 17:31
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Lexicon posted:Uuhhh, you guys are lobbing sentences at each other, yet, by my reading, you actually don't really disagree on anything. You both seem to be arguing a variant of the same point. I think the problem here is that he was mistaking inflation in a specific asset class for the textbook definition of systemic inflation. If you can't distinguish between the two, you are basically saying it is impossible for an asset-class bubble to develop, which I'm sure the Nobel committee for economics prizes would be thrilled to hear.
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Apr 9, 2013 17:33
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dethslayer666 posted:A housing bubble is not the same as inflation. Are you trolling me? dethslayer666 posted:(Milton Friedman Quote) Yep, trolling for sure.
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Apr 9, 2013 18:26
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Dusseldorf posted:Well if housing prices are going up in real dollars then definitionally it's not inflation. It's "asset-price inflation". I even linked to an entire paper talking about it.
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Apr 9, 2013 18:41
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Edit: pointless.
Franks Happy Place fucked around with this message at 20:08 on Apr 9, 2013 |
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Apr 9, 2013 20:03
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According to Ben Rabidoux, Montreal now has almost as many homes on the market as Vancouver and Toronto combined. Just in case you didn't think it was a national phenomenon or anything!
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Apr 10, 2013 17:37
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Lexicon posted:To recall a previous talking point: that it's so widespread nationwide supports the view that it's not predominantly foreign money bidding up the prices, in my opinion. I agree that it's not predominantly foreign, but you'd have to be blind not to see that the two most inflated areas in all of Canada- Richmond and the Dunbar area of Vancouver- are also attracting the vast majority of the hot money. Every bubble has it's worst locale or what have you, driven by an added element specific to that area- this one is no different. Like I said earlier, it's mostly a shame because of all the racism this will spawn, and the fact that it would have been so easily preventable with even basic currency import controls.
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Apr 10, 2013 20:58
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The First Time Homebuyer Plan is a loving disgrace and a miscarriage of taxation policy, and it should be scrapped ASAP.
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Apr 11, 2013 17:21
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SpannerX posted:How about the LLP? I've used it to get my ticket, and it came in handy. Granted I paid it back in 2 years. The LLP I still object to on some level because of the taxation implications, but at least there you can make a two-degree argument about income potential leading to better retirement outcomes, so it's still cause and effect. The FTHP, not so much- it's just a naked pro-homeowner tax shift, that also has the double effect of permanently damaging people's RRSP savings rates. All the government is doing is allowing people to mortgage their future in order to prop up consumption in one sector of the economy, while also dodging taxes to do so.
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Apr 11, 2013 17:30
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*sad trombone*REBGV posted:The MLS® Home Price Index composite benchmark price for all residential properties in Greater Vancouver is currently $597,300. This represents a decline of 3.9 per cent compared to this time last year. Well, that's not an apocalypse (yet), but that's officially the start of a crash.
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May 2, 2013 20:32
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Baronjutter posted:Victoria check in! Hmm, that's weird, since prices are still well down from peak:  ...and the increases in the average we're seeing recently are largely due to sales being godawful and the market skewing towards fewer and fewer sales, mostly at the higher end, indicative of a market that is still definitely in distress. The pre-crash stall, as it were, just like in most U.S. cities in 2007/2008. I wonder where you're getting that information about the market being very str... Baronjutter posted:A realtor friend of the family was practically begging them to convince me to buy now because we're "due for another boom". Aha, I think I found the problem. ocrumsprug posted:This appears to have since been confirmed. 25 year mortgages will likely be the final nail in coffin as carrying costs are about to go way up. FWIW, the effect roughly translates to $50 more per month in mortgage costs per $100,000 borrowed. So yes, quite substantial.
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May 14, 2013 17:31
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