The BC Real Estate Discussion Thread

[The Arrogant Worms]

Some nice low mortgage rates available out there right now if you go thru a broker.......… and chances are they could go lower.

 

RateSpy.com

 

 

It's raining rate drops today. Dozens of lenders trimming fixed mortgage pricing. The lowest 5-year fixed rate — which applies to default insured mortgages in AB, BC, NL, NB, ON, PE — is now down to 2.03%.

 

 

https://twitter.com/RateSpy?ref_src=twsrc^google|twcamp^serp|twgr^author

 

 

 

 

 

 

 

 

 

 

[aGENT]

Anybody seen any recent,  informative articles, tweets etc on what the 'apocalypse' is bound to do to BC real estate prices in the coming months? 

 

Seems anything posted more than a few days ago was mostly 'short term problem, everything will be fine in'. More recent posts in the last few days are far less certain however...

 

https://www.cbc.ca/news/canada/british-columbia/covid-19-spring-real-estate-1.5497726

 

Quote

Unlike the stock market, COVID-19 hasn't affected the Lower Mainland real estate market — at least, not in a negative way.

A friend of mine just closed on an apartment for $500,000 where she had to deal with a bidding war and ended up paying over asking. Open houses are still well-attended and quality properties are being snapped up quickly. Even detached homes at higher price points are starting to move.  

Low supply and high demand have pushed up prices — particularly in the case of condos which are selling at all-time highs.  

 

To cushion the economic blow caused by COVID-19, central banks around the world have cut interest rates. Anyone with an existing variable mortgage, or someone looking to get one, can expect their borrowing costs to decrease. The Bank of Canada cut rates by a full percentage point since the beginning of March.  

• Stay informed by joining our CBC Vancouver Facebook group on coronavirus. 

We are also seeing investors flee the stock market and park their money in investment grade bonds. A result of this flight to safety is that fixed-term mortgage rates are dropping. Lower mortgage rates increase the amount a home buyer can borrow, which pushes up prices as borrowers are able to make higher offers. 

We also cannot forget about the mortgage stress test. On Feb. 18, the federal government announced that the hurdle rate of the stress test would be lowered effective April 6.  In anticipation of this change, many buyers re-entered the housing market, increasing demand on a real estate market with limited inventory.  However, as of last Friday, the Department of Finance announced that changes to the stress test have been put on hold. 

Buyers beware

All these factors are fuelling the housing market and not even COVID-19 appears to be able to slow it down — yet.   

It was just a month ago when stock markets were at an all-time high, largely due to the fear of missing out, whereas today it's the opposite: many people are panic selling.

The same could happen, but to a lesser degree, with real estate, as buying psychology is fickle.

 

• Read more about the coronavirus in B.C.

It's important to also keep in mind that, since all financial markets are interconnected, a stock market drop should affect the housing market. For example, many new buyers turn to the bank of mom and dad to help with their down payment. However, after experiencing a drop in their investment portfolio many parents will be less inclined, or no longer able, to help their children fund a down payment.  

Another important factor to consider is the potential loss of income that COVID-19 may cause. Some lenders might be hesitant to lend to applicants working in areas affected by the pandemic such as the travel or oil and gas industries.  

Selling? List properties right away

All these variables can affect demand.

If I were a buyer, I would be cautious. Don't underestimate COVID-19's negative impacts on the economy, jobs and buyers' sentiment and avoid overstretching your budget — something that tends to happen when buying in a seller's market.

• Is the coronavirus ravaging your investment portfolio? Here's what you need to know

My advice to sellers who are looking to cash out or downsize is to list their properties right away. Momentum is on your side and there is limited inventory, so sellers of quality homes are getting top dollar. The demand is currently high, but I wouldn't be complacent and assume that it will last. If offered a reasonable price, I would take it.   

If you don't need to sell, I wouldn't and I'm not. I still think housing in B.C. is a great long-term investment.

 

 

[aGENT]

1 hour ago, nuckin_futz said:

Coronavirus - National Bank of Canada considering payment deferrals on mortgages up to 6 months

Wed 18 Mar 2020 00:51:45 GMT

 

NBC is Canada's 6th largest commercial bank - mulling its response to the COVID-19 impact.

• considering payment deferrals on mortgages up to 6 months
• special loans to cover living expenses may be offered 

I'd be awaiting details on this if you are in Canada, what the terms etc will be.

 

That 6 month timeframe the bank is flagging does sound about right to me. The deleterious effects could stretch on longer though. 

That ought to keep prices a bit more stable and people in their homes if it happens.

[Russ]

https://www.burnabynow.com/interest-rates-on-new-mortgages-increasing-despite-bank-of-canada-rate-drop-1.24102750

 

Those bastards at the banks are trying to cash in, BoC drops their rates which means mortgages should drop but those buggers are increasing rates apparently?  Scummy ass banks.

[aGENT]

Our realtor sent us a video where BCREA Chief Economist Brendon Ogmundson discusses their 'Market Intelligence Report'. Here's a link to the pdf of that report.

 

https://www.bcrea.bc.ca/wp-content/uploads/Is-It-Different-This-Time-Recessions-and-the-BC-Housing-Market.pdf

 

Quote

Summary Findings:
 

• The 2020 COVID-19 driven recession will be deep, though the duration may be shorter than past recessions.
• We expect that home sales will post an initial sharp decline as households and the real estate sector adhere to social distancing.
• As measures implemented to mitigate the spread of COVID-19 are gradually lifted, we expect that low interest rates and pent-up demand will translate to a significant recovery in home sales and prices.

 

It sounds like they're expecting low sales, a glut of units and lower prices in May-June, bottoming out then and then slowly recovering/stabilizing after that.

 

So if you're waiting to buy like we are ( @Warhippy ), that's probably the window you want to find something if you can.

 

 

Can't seem to find an image (in the pdf) of the average price forecast but it shows a similar trend as the above chart.

[Warhippy]

2 hours ago, aGENT said:

Our realtor sent us a video where BCREA Chief Economist Brendon Ogmundson discusses their 'Market Intelligence Report'. Here's a link to the pdf of that report.

 

https://www.bcrea.bc.ca/wp-content/uploads/Is-It-Different-This-Time-Recessions-and-the-BC-Housing-Market.pdf

 

 

It sounds like they're expecting low sales, a glut of units and lower prices in May-June, bottoming out then and then slowly recovering/stabilizing after that.

 

So if you're waiting to buy like we are ( @Warhippy ), that's probably the window you want to find something if you can.

 

 

Can't seem to find an image (in the pdf) of the average price forecast but it shows a similar trend as the above chart.

They have expectations but they're not taking in to account mortgage defaults or crash sales.  I think it's potentially far worse than they're really willing to admit

[CBH1926]

On 3/23/2020 at 11:57 AM, Russ said:

https://www.burnabynow.com/interest-rates-on-new-mortgages-increasing-despite-bank-of-canada-rate-drop-1.24102750

 

Those bastards at the banks are trying to cash in, BoC drops their rates which means mortgages should drop but those buggers are increasing rates apparently?  Scummy ass banks.

Risk of borrowing money is going up so they are trying to calculate that in.

Its sucks for consumers but it’s cost of doing business.
 

[Russ]

2 hours ago, CBH1926 said:

Risk of borrowing money is going up so they are trying to calculate that in.

Its sucks for consumers but it’s cost of doing business.
 

Glad you quoted me I gotta fill out my mortgage application tonight lol

[CBH1926]

31 minutes ago, Russ said:

Glad you quoted me I gotta fill out my mortgage application tonight lol

Best of luck, it’s just like colonoscopy, you hope it ends fast.

[Jester13]

On 4/28/2020 at 3:43 PM, Warhippy said:

They have expectations but they're not taking in to account mortgage defaults or crash sales.  I think it's potentially far worse than they're really willing to admit

Agreed. If you, or anyone else, haven't listened to this CBC article/podcast yet, it's worth the 20min listen: 

 

Too big to fail: 

 

https://www.cbc.ca/radio/frontburner/too-big-to-fail-covid-19-and-canadian-real-estate-1.5555419

 

I personally don't see anything with the housing market being bailed out because it's "too big to fail" because that would set a major precedent that would defeat the idea of housing as an investment. The worst is yet to come, though, with Canada, specifically Toronto, Vancouver, and Victoria where I live. 

 

It takes a while for the HM to show effects, and now that we've seen sales plummet, we'll start to see lots of people defaulting in the coming months. Jobs are lost and coming back very, very slowly, and if/when a second wave of covid happens it'll hit many even harder; but, immigration will be down as well, which is a big driver of the HM.

 

I feel for those who lose their homes and possibly go bankrupt, but at the same time, if anyone ends up in that position then it means they shouldn't have been investing in the HM in the first place. I know people who just bought for their first time and they literally know nothing about mortgages or owning in general (do you know how much blinds cost? They once asked me), and they put down the minimum downpayment and bought at the top of their budget. One of them works in the restaurant industry and just lost his job. I feel for them, but at the same time it's people like this who screw over the economy with poor financial decisions. What happened to the days of saving, saving, saving and knowing that both people have secure careers? I hope this is a wake up call for Canadians and our banking industry like it was in 08 for the US; unfortunately, Canada didn't get the memo back then. 

 

Like you, WHippy, we're in a prime (pun intended) position to buy, where we're ready but waiting until things bottom and prices come down, and they will come down, it just depends on how much. There's no rush right now. We'll just let our downpayment and "oh shiat" account grow. 

[Warhippy]

On 5/6/2020 at 6:39 AM, Jester13 said:

Agreed. If you, or anyone else, haven't listened to this CBC article/podcast yet, it's worth the 20min listen: 

 

Too big to fail: 

 

https://www.cbc.ca/radio/frontburner/too-big-to-fail-covid-19-and-canadian-real-estate-1.5555419

 

I personally don't see anything with the housing market being bailed out because it's "too big to fail" because that would set a major precedent that would defeat the idea of housing as an investment. The worst is yet to come, though, with Canada, specifically Toronto, Vancouver, and Victoria where I live. 

 

It takes a while for the HM to show effects, and now that we've seen sales plummet, we'll start to see lots of people defaulting in the coming months. Jobs are lost and coming back very, very slowly, and if/when a second wave of covid happens it'll hit many even harder; but, immigration will be down as well, which is a big driver of the HM.

 

I feel for those who lose their homes and possibly go bankrupt, but at the same time, if anyone ends up in that position then it means they shouldn't have been investing in the HM in the first place. I know people who just bought for their first time and they literally know nothing about mortgages or owning in general (do you know how much blinds cost? They once asked me), and they put down the minimum downpayment and bought at the top of their budget. One of them works in the restaurant industry and just lost his job. I feel for them, but at the same time it's people like this who screw over the economy with poor financial decisions. What happened to the days of saving, saving, saving and knowing that both people have secure careers? I hope this is a wake up call for Canadians and our banking industry like it was in 08 for the US; unfortunately, Canada didn't get the memo back then. 

 

Like you, WHippy, we're in a prime (pun intended) position to buy, where we're ready but waiting until things bottom and prices come down, and they will come down, it just depends on how much. There's no rush right now. We'll just let our downpayment and "oh shiat" account grow. 

I think we're all there together.

 

But for once, the numbers aren't making sense to me.  Businesses keep reporting massive losses yet their stocks grow.  They keep saying they'll take a year or more to get back to even 80% of pre covid levels.  But their stocks keep rising.  Millions on government payments yet the prices of everything are not dropping.  Oil and Fuel prices in the dirt, no change.

 

An economist I read up on said that the government is hyper inflating and already prominent bubble.  That they're kicking the can down the road again, but this time the road ends at a cliff and you cannot get the can back.  Economists are expecting Q2 and Q3 to be absolutely devastating for small business and personal finances because people are currently only being propped up by deferrals and government payments

 

https://www.cbc.ca/news/business/bankruptcies-coronavirus-personal-corporate-deferral-1.5551722

 

Then on top of that housing sales are down.  Not just down but way down.  Realtors have been let go by their firms in their thousands.  near 40 year low for sales, 40% down this time last year but...prices haven't dropped.  In some cases they've increased.

 

https://dailyhive.com/vancouver/metro-vancouver-home-sales-april-2020

 

For once, the numbers make no sense.  I am still holding out because i know reality will win over the economic dream the governments are pushing.  But it's seriously concerning to physically watch a bubble be inflated to these levels

 

 

[Jester13]

6 minutes ago, Warhippy said:

I think we're all there together.

 

But for once, the numbers aren't making sense to me.  Businesses keep reporting massive losses yet their stocks grow.  They keep saying they'll take a year or more to get back to even 80% of pre covid levels.  But their stocks keep rising.  Millions on government payments yet the prices of everything are not dropping.  Oil and Fuel prices in the dirt, no change.

 

An economist I read up on said that the government is hyper inflating and already prominent bubble.  That they're kicking the can down the road again, but this time the road ends at a cliff and you cannot get the can back.  Economists are expecting Q2 and Q3 to be absolutely devastating for small business and personal finances because people are currently only being propped up by deferrals and government payments

 

https://www.cbc.ca/news/business/bankruptcies-coronavirus-personal-corporate-deferral-1.5551722

 

Then on top of that housing sales are down.  Not just down but way down.  Realtors have been let go by their firms in their thousands.  near 40 year low for sales, 40% down this time last year but...prices haven't dropped.  In some cases they've increased.

 

https://dailyhive.com/vancouver/metro-vancouver-home-sales-april-2020

 

For once, the numbers make no sense.  I am still holding out because i know reality will win over the economic dream the governments are pushing.  But it's seriously concerning to physically watch a bubble be inflated to these levels

 

 

Yeah, that's just it, debt levels have just kept going up since the 08 crash, so Canadians didn't learn their lesson. Now there are so many people and businesses who never save for a rainy day or emergency situation like this and yet they won't have any more credit to bail themselves out. Housing prices haven't moved yet, but they will. The housing market takes a while to start feeling the effects, but it will happen eventually, and it's going to be ugly when it happens, but good for lots of people who have been squeezed out for sooooo many years. 

 

My only concern with this, as someone who works hard to save, save, save, and take on debt only when I'm safe to do so, is that governments will start bailing out sectors like the housing market to help people who got themselves into deep shiat when they shouldn't have in the first place. If that happens I'm going to be protesting, ha! Honestly, if we start to bail out irresponsible industry and people that is a recipe for disaster, because, like you said, it's just kicking the can down the road. And guess who will end up paying for all these bailouts one day... not those who collect them. I mean, there's even been talk about bailing out retired people's investments. How is that fair in any way? You choose to invest, you choose to take on the risk. If all of a sudden the risk factor is taken out of investing, whether the stock or housing market, that changes everything and just doesn't seem like a sustainable solution. 

[CBH1926]

GVA real estate is like a big tower of cards and it’s getting little windy.

[Warhippy]

1 hour ago, Jester13 said:

Yeah, that's just it, debt levels have just kept going up since the 08 crash, so Canadians didn't learn their lesson. Now there are so many people and businesses who never save for a rainy day or emergency situation like this and yet they won't have any more credit to bail themselves out. Housing prices haven't moved yet, but they will. The housing market takes a while to start feeling the effects, but it will happen eventually, and it's going to be ugly when it happens, but good for lots of people who have been squeezed out for sooooo many years. 

 

My only concern with this, as someone who works hard to save, save, save, and take on debt only when I'm safe to do so, is that governments will start bailing out sectors like the housing market to help people who got themselves into deep shiat when they shouldn't have in the first place. If that happens I'm going to be protesting, ha! Honestly, if we start to bail out irresponsible industry and people that is a recipe for disaster, because, like you said, it's just kicking the can down the road. And guess who will end up paying for all these bailouts one day... not those who collect them. I mean, there's even been talk about bailing out retired people's investments. How is that fair in any way? You choose to invest, you choose to take on the risk. If all of a sudden the risk factor is taken out of investing, whether the stock or housing market, that changes everything and just doesn't seem like a sustainable solution. 

The government will bail out CMHC like they did in 2008/2009 but a general bailout of mortgage owners is highly unlikely.  The bankruptcy run is coming.  it has too.  People are just already so over leveraged that they cannot borrow more.

 

As a person who is also saving, I like the idea of having a massive downpayment or sizeable one and money for renovations.  No matter what home I buy I will be pounding money in to green retrofits to ensure my bills are as minimal as possible.  No lawn except for a small patch in the back, geothermal if possible, solar bank to help offset, new windows, insulation, low flow etc.  I am going to be soaking as much return from my investment as possible when I buy

[kingofsurrey]

Prices are sticky.... sales have fallen off the cliff.

 

Realtor numbers....  will be dropping like flies...  moving back to previous jobs.

 

Give this 6 more months and prices here will be crashing....   Yes businesses will be reopening but under strict guidelines that will limit customers... reduce profit. Limit the number of employees needed.     Tick / Tick / Tick....

[nuckin_futz]

The Canadian government kneecapping its own housing market is unprecedented

Thu 21 May 2020 13:40:46 GMT

 

One of the craziest forecasts you will ever see

An extraordinary thing happened in Canada earlier this week. It largely went unnoticed initially but now people are noticing.

 

In a speech in Ottawa on Tuesday, Canada's government-backed mortgage insurance company -- the CMHC -- forecast a dramatic national house price decline.

 

"Looking at debt multiples of disposable income, that measure will climb from 176 per cent in late 2019 to well over 200 per cent through 2021. Moreover, CMHC is now forecasting a decline in average house prices of 9 - 18 per cent in the coming 12 months. The resulting combination of higher mortgage debt, declining house prices and increased unemployment is cause for concern for Canada's longer-term financial stability," President and CEO Evan Siddall said.

 

The Canada Mortgage and Housing Corporation is a crown corporation. It technically operates at arms length from the government, like Fannie and Freddie in the US, but to Canadians, it might as well be Trudeau himself telling them that house prices are about to tumble.

 

What's insane about this is that it could very well become a self-fulfilling prophesy. This isn't a bank or economist making the call, it's the government. Even then, it's a particularly dire forecast with bank economists in the -5-10% range.

 

For a city like Toronto or Vancouver, where the median house price is well-above $1m, a potentially 18% drop would wipe out buyers.

 

I'm guessing this is some kind of attempt at transparency and independence but it's madness. House prices are a confidence game and few would argue that parts of Canada have wildly overvalued housing but for a government to pop its own bubble is unprecedented.

 

Economists (and semi-permabear) David Rosenberg spells out what such a fall would mean for the loonie, which continues to defy gravity.

[stawns]

29 minutes ago, nuckin_futz said:

The Canadian government kneecapping its own housing market is unprecedented

Thu 21 May 2020 13:40:46 GMT

 

One of the craziest forecasts you will ever see

An extraordinary thing happened in Canada earlier this week. It largely went unnoticed initially but now people are noticing.

 

In a speech in Ottawa on Tuesday, Canada's government-backed mortgage insurance company -- the CMHC -- forecast a dramatic national house price decline.

 

"Looking at debt multiples of disposable income, that measure will climb from 176 per cent in late 2019 to well over 200 per cent through 2021. Moreover, CMHC is now forecasting a decline in average house prices of 9 - 18 per cent in the coming 12 months. The resulting combination of higher mortgage debt, declining house prices and increased unemployment is cause for concern for Canada's longer-term financial stability," President and CEO Evan Siddall said.

 

The Canada Mortgage and Housing Corporation is a crown corporation. It technically operates at arms length from the government, like Fannie and Freddie in the US, but to Canadians, it might as well be Trudeau himself telling them that house prices are about to tumble.

 

What's insane about this is that it could very well become a self-fulfilling prophesy. This isn't a bank or economist making the call, it's the government. Even then, it's a particularly dire forecast with bank economists in the -5-10% range.

 

For a city like Toronto or Vancouver, where the median house price is well-above $1m, a potentially 18% drop would wipe out buyers.

 

I'm guessing this is some kind of attempt at transparency and independence but it's madness. House prices are a confidence game and few would argue that parts of Canada have wildly overvalued housing but for a government to pop its own bubble is unprecedented.

 

Economists (and semi-permabear) David Rosenberg spells out what such a fall would mean for the loonie, which continues to defy gravity.

ugh, I'm stuck on the fence of deciding whether to sell my farm or hang onto it.  It's my lottery ticket for retirement

[aGENT]

55 minutes ago, nuckin_futz said:

The Canadian government kneecapping its own housing market is unprecedented

Thu 21 May 2020 13:40:46 GMT

 

One of the craziest forecasts you will ever see

An extraordinary thing happened in Canada earlier this week. It largely went unnoticed initially but now people are noticing.

 

In a speech in Ottawa on Tuesday, Canada's government-backed mortgage insurance company -- the CMHC -- forecast a dramatic national house price decline.

 

"Looking at debt multiples of disposable income, that measure will climb from 176 per cent in late 2019 to well over 200 per cent through 2021. Moreover, CMHC is now forecasting a decline in average house prices of 9 - 18 per cent in the coming 12 months. The resulting combination of higher mortgage debt, declining house prices and increased unemployment is cause for concern for Canada's longer-term financial stability," President and CEO Evan Siddall said.

 

The Canada Mortgage and Housing Corporation is a crown corporation. It technically operates at arms length from the government, like Fannie and Freddie in the US, but to Canadians, it might as well be Trudeau himself telling them that house prices are about to tumble.

 

What's insane about this is that it could very well become a self-fulfilling prophesy. This isn't a bank or economist making the call, it's the government. Even then, it's a particularly dire forecast with bank economists in the -5-10% range.

 

For a city like Toronto or Vancouver, where the median house price is well-above $1m, a potentially 18% drop would wipe out buyers.

 

I'm guessing this is some kind of attempt at transparency and independence but it's madness. House prices are a confidence game and few would argue that parts of Canada have wildly overvalued housing but for a government to pop its own bubble is unprecedented.

 

Economists (and semi-permabear) David Rosenberg spells out what such a fall would mean for the loonie, which continues to defy gravity.

Well, we finally ended up removing subjects last week on a place as we've had about enough of living with my parents 

 

And really, most houses where we've been looking have been selling at +/- 10% above assessed and we got this one basically at assessed... So I guess we got it for the equivalent of a +/- 10% 'drop' already.

 

Plus we have well over 50% down and plan on being there for 15+ years so even if we didn't buy at the absolute bottom, we're HIGHLY unlikely to end upside down and have plenty of time for markets to go up, down, left, right etc.

 

Biggest thing is getting our own space, things, life etc back and get started on making it or new home.

Edited May 21, 2020 by aGENT

[Warhippy]

1 hour ago, aGENT said:

Well, we finally ended up removing subjects last week on a place as we've had about enough of living with my parents 

 

And really, most houses where we've been looking have been selling at +/- 10% above assessed and we got this one basically at assessed... So I guess we got it for the equivalent of a +/- 10% 'drop' already.

 

Plus we have well over 50% down and plan on being there for 15+ years so even if we didn't buy at the absolute bottom, we're HIGHLY unlikely to end upside down and have plenty of time for markets to go up, down, left, right etc.

 

Biggest thing is getting our own space, things, life etc back and get started on making it or new home.

Meanwhile we're still waiting lol

[aGENT]

4 minutes ago, Warhippy said:

Meanwhile we're still waiting lol

You staying with parents?