The BC Real Estate Discussion Thread

[bishopshodan]

The telly machine just informed me that the most people in 60 years have moved to BC.

 

Without much inventory, the product will stay valuable. 

[JM_]

1 hour ago, bishopshodan said:

The telly machine just informed me that the most people in 60 years have moved to BC.

 

Without much inventory, the product will stay valuable. 

maybe. I just wonder if this will kill some equity and do nothing to help young people enter the market. On its own, this move will do very little to help. 

[Alflives]

3 minutes ago, JM_ said:

maybe. I just wonder if this will kill some equity and do nothing to help young people enter the market. On its own, this move will do very little to help. 

Interest rates are on th3 rise.  The inflated markets, where houses are worth insane amounts more than what they should be, will see a serious correction.  When interest rates hit 10% we will see those types of properties decrease by 50-70%.   Lots of people will be handing their keys to the banks.  The banks will sell for cheap.  Banks will take losses, but write those off as business costs.  Middle class will pay with government austerity measures.  History repeats.  

[bishopshodan]

11 minutes ago, JM_ said:

maybe. I just wonder if this will kill some equity and do nothing to help young people enter the market. On its own, this move will do very little to help. 

The market in bc will be supported by the influx of people coming in for years to come, I would think.

 

3 minutes ago, Alflives said:

Interest rates are on th3 rise.  The inflated markets, where houses are worth insane amounts more than what they should be, will see a serious correction.  When interest rates hit 10% we will see those types of properties decrease by 50-70%.   Lots of people will be handing their keys to the banks.  The banks will sell for cheap.  Banks will take losses, but write those off as business costs.  Middle class will pay with government austerity measures.  History repeats.  

BC is rich.

I don't see high end types turning in keys, nor do i see 70% decreases. 

 

We don't have the inventory. 

[JM_]

12 hours ago, bishopshodan said:

The market in bc will be supported by the influx of people coming in for years to come, I would think.

 

BC is rich.

I don't see high end types turning in keys, nor do i see 70% decreases. 

 

We don't have the inventory. 

high end types? there's a lot of regular folk who can't absorb much of a hit to their home equity. Too much easy line of credit access, low interest rates, and now too big a potential correction could really hurt. I know, their choice, etc. just wondering why the fed's are doing this now, in this way, when i really doubt there's any plan to actually increase housing supply. 

[bishopshodan]

3 minutes ago, JM_ said:

high end types? there's a lot of regular folk who can't absorb much of a hit to their home equity. Too much easy line of credit access, low interest rates, and now too big a potential correction could really hurt. I know, their choice, etc. just wondering why the fed's are doing this now, in this way, when i really doubt there's any plan to actually increase housing supply. 

I hear you, I was just speaking about BC. I believe the combination of the many people moving here and low inventory will keep the market somewhat stable. 

 

I said high end types referring to what Alf stated '....where houses are worth insane amounts more than what they should be.... those types of properties'

[JM_]

2 minutes ago, bishopshodan said:

I hear you, I was just speaking about BC. I believe the combination of the many people moving here and low inventory will keep the market somewhat stable. 

 

I said high end types referring to what Alf stated '....where houses are worth insane amounts more than what they should be.... those types of properties'

scary thing to me is there are likely too many people overextended on regular homes and loc's. 

 

For me, I'm fine with taking an equity hit on a plan that actually helps create new affordable homes for people, but I'm not OK with some half-baked idea that just kills equity and is just designed for a headline.

 

Horgan, e.g., has done nothing for affordability or supply. Sure we have a tax, but thats it. 

[Warhippy]

13 hours ago, bishopshodan said:

BC is rich.

I don't see high end types turning in keys, nor do i see 70% decreases. 

 

We don't have the inventory. 

BC is in fact rich.

 

The issue is, how many people from across the nation and in the US/China and even Europe own vacation properties here.  The Estimate in Osoyoos is 800 units that are lived in primarily only over the summer or via Air BnB listings.  When or if there IS in fact an economic crash, primary homes will not be the ones sold to make up shortfalls.

 

With so many people living less than pay cheque to pay cheque these interest rate bumps AND uncertainty in the market will also cause established investments some level of shock leading to less of a safety net.

 

Make no mistake about it, the moment 800+ to 1500+ units in a region like the Southern Okanagan go up for sale in a month; you'll see wide spread issues in a hurry.

[bishopshodan]

28 minutes ago, JM_ said:

scary thing to me is there are likely too many people overextended on regular homes and loc's. 

 

For me, I'm fine with taking an equity hit on a plan that actually helps create new affordable homes for people, but I'm not OK with some half-baked idea that just kills equity and is just designed for a headline.

 

Horgan, e.g., has done nothing for affordability or supply. Sure we have a tax, but thats it. 

Didn't Eby threaten to take development powers away from the municipalities? I think past provincial govs have threatened the same...I don't know if they are going to do it but do you think that would help speed up developments?  In theory it should, but i could imagine some angry nimby people in some areas

 

[bishopshodan]

3 minutes ago, Warhippy said:

Make no mistake about it, the moment 800+ to 1500+ units in a region like the Southern Okanagan go up for sale in a month; you'll see wide spread issues in a hurry.

Sure would be interesting.

I think my mind is still intrigued by the record number of people that moved to BC last year.

[JM_]

19 minutes ago, bishopshodan said:

Didn't Eby threaten to take development powers away from the municipalities? I think past provincial govs have threatened the same...I don't know if they are going to do it but do you think that would help speed up developments?  In theory it should, but i could imagine some angry nimby people in some areas

 

Eby, don't get me started on him. Its a hollow threat. Unless the provinces is going to take over municipal services too its meaningless. Vicious compliance by the city will stall projects anyway.

 

Its NDP buck passing. Blame the cities who get almost no tax base to do anything. The province is sitting on billions in land they could open up for new developments but they point fingers at the city. Nothing is going to come of it. 

Edited April 7, 2022 by JM_

[bishopshodan]

I really agree with this part of this article. 

 

https://www.cbc.ca/news/politics/freeland-federal-budget-housing-1.6410544

 

A problem of short supply and heavy demand

The Liberals pitched a plan to offset monthly mortgage costs by reducing the insurance premiums charged by the Canada Mortgage and Housing Corporation (CMHC) on some loans. They also said they would make the First-Time Home Buyers' Incentive — a shared-equity mortgage program which sees the government provide some funds for a down payment in return for a stake in the home — more flexible.

But Kevin Lee, the CEO of the Canadian Home Builders' Association, said the government can't be focused on these sorts of incentives alone. He said home prices are high in Canada because there are not enough of them.

"It's good old economics. It's also about supply and demand. When you don't have enough of something, prices go up and that's what we're seeing," he told CBC News.

 

Housing advocates call for the construction of 50,000 new social housing units in Quebec at a protest in Montreal on April 2. (Rowan Kennedy/CBC)

Lee said Canada has far fewer housing units per person than other developed countries. In fact, recent estimates suggest Canada is about 1.8 million homes short of the G7 average.

Over the past 20 years, Canada has built around 200,000 new housing units per year. At the current rate, it would take years of steady construction just to bring Canada's housing stock up to the levels seen in other Western countries.

The housing accelerator fund

Lee said Canada needs to supercharge construction and consistently repeat the record-breaking year home builders enjoyed in 2021, when they churned out more than 270,000 new units — a construction pace not seen in five decades.

Lee said the housing crunch "is really the number one issue that we have right now as a country." He suggested a possible fix in the "housing accelerator fund" the Liberal Party pitched in the last election campaign.

The party's platform said the government would earmark some $4 billion for municipalities that "grow housing supply faster than their historical average" — part of a plan to build 100,000 new middle-class homes in Canada's cities by 2024-25. That money could be used as an incentive to encourage municipalities to make home construction easier.

[bishopshodan]

1 minute ago, JM_ said:

Eby, don't get me started on him. Its a hollow threat. Unless the provinces is going to take over municipal services too its meaningless. Viscous compliance by the city will stall projects anyway.

 

Its NDP buck passing. Blame the cities who get almost no tax base to do anything. The province is sitting on billions in land they could open up for new developments but they point fingers at the city. Nothing is going to come of it. 

Haha I agree. they wont do it but something needs to speed up the development issues.

[JM_]

1 minute ago, bishopshodan said:

Haha I agree. they wont do it but something needs to speed up the development issues.

oh for sure, permitting times are ridiculous.

 

Open up supply, thats the only thing that can drive change. We actually need to get everyone at the table, from developers, local, provincial, feds, and buyers at the table to end the buck passing and inaction. 

[stawns]

6 minutes ago, JM_ said:

oh for sure, permitting times are ridiculous.

 

Open up supply, thats the only thing that can drive change. We actually need to get everyone at the table, from developers, local, provincial, feds, and buyers at the table to end the buck passing and inaction. 

as a farmer, I'm having a real love/hate situation with permits etc.  I have a small (17 acres) farm and currently it has two residences on it.......one is a small apartment, which is a part of the larger ag building where my ex lives and a modu;lar house (not on a foundation) where my mother lives.  I pay high rent off farm and also pay half my farm mortgage and it's a pretty tough go every month and almost impossible to save anything.  I've been trying for almost three years to get another small residence on the farm so I can live and work there and my regional district won't even listen to my case.

 

The farm is in the alr, but all I'm asking for is a small aprtment above a detached garage/workshop/storage building.  I own the property, I pay half the mortgage and operating costs, I work there and I'm taking rental stock off the market unneccessarily and I can't even get the slightest consideration to remedy my situation.  It's incredibly frustrating.

[JM_]

18 minutes ago, stawns said:

as a farmer, I'm having a real love/hate situation with permits etc.  I have a small (17 acres) farm and currently it has two residences on it.......one is a small apartment, which is a part of the larger ag building where my ex lives and a modu;lar house (not on a foundation) where my mother lives.  I pay high rent off farm and also pay half my farm mortgage and it's a pretty tough go every month and almost impossible to save anything.  I've been trying for almost three years to get another small residence on the farm so I can live and work there and my regional district won't even listen to my case.

 

The farm is in the alr, but all I'm asking for is a small aprtment above a detached garage/workshop/storage building.  I own the property, I pay half the mortgage and operating costs, I work there and I'm taking rental stock off the market unneccessarily and I can't even get the slightest consideration to remedy my situation.  It's incredibly frustrating.

I'd probably just build it and claim it was an artist studio space on the permit. Then just live in it. 

Edited April 7, 2022 by JM_

[Boudrias]

15 hours ago, JM_ said:

it'll be interesting to see what this does to people who are relying on home equity for retirement. 

The Americans are now talking of sustained 8% inflation. It never ceases to amaze me how politicians and bureaucrats assume/overestimate the citizens ability to absorb increased costs. Inflation is a tax and usually is a result of bad management. A home being a asset that can be liquidated to fund retirement is becoming somewhat moot. Sell the home and where do you go? Retirement homes are unaffordable for most people. Many young people are incredibly leveraged on their housing. If increased mortgage rates don’t get them then a recession/depression will. At some point gladhanders like Trudeau won’t be able to print enough money to keep them afloat. 
 

As an aside I heard the suggestion that 30% of the real estate money changing hands in Vancouver was from organized crime. Sorry but I can’t remember the source. 

[JM_]

3 minutes ago, Boudrias said:

The Americans are now talking of sustained 8% inflation. It never ceases to amaze me how politicians and bureaucrats assume/overestimate the citizens ability to absorb increased costs. Inflation is a tax and usually is a result of bad management. A home being a asset that can be liquidated to fund retirement is becoming somewhat moot. Sell the home and where do you go? Retirement homes are unaffordable for most people. Many young people are incredibly leveraged on their housing. If increased mortgage rates don’t get them then a recession/depression will. At some point gladhanders like Trudeau won’t be able to print enough money to keep them afloat. 

If the plan was to say e.g., cash out of your 2 mil Vancouver home (which isn't even a special place anymore) and say carry 600k of that after paying off your LOC to a 2 bed apartment in Kelowna, that can still be done. 

 

Young people are screwed, unless they get the home via inheritance. They might need to take on their parents debt tho at the same time. 

 

The only option I see is a huge investment in co-op's and leasehold properties. The gov't could back this tomorrow, but they won't, at least the NDP won't because as you know, developers are satan, or at least satan-adjacent. 

 

 

3 minutes ago, Boudrias said:

 

As an aside I heard the suggestion that 30% of the real estate money changing hands in Vancouver was from organized crime. Sorry but I can’t remember the source. 

I'd be surprised at that number, not sure how anyone could know that. 

[nuckin_futz]

Fed's Bullard: Fed funds rate of around 3.5% needed to fight inflation

• Bullard presentation at the University of Missouri

• Even with financial market tightening, the Fed remains behind the curve
• Even a 'generous' reading of mon pol rules shows Fed funds rate of around 3.50% needed to fight high inflation
• Important that the Fed now 'ratify' the guidance it has given with interest rates hikes at coming meetings.

 

**********************************

 

It should be noted Bullard is the most hawkish Fed member. He's always got a boner for raising rates.

[taxi]

18 hours ago, Alflives said:

Interest rates are on th3 rise.  The inflated markets, where houses are worth insane amounts more than what they should be, will see a serious correction.  When interest rates hit 10% we will see those types of properties decrease by 50-70%.   Lots of people will be handing their keys to the banks.  The banks will sell for cheap.  Banks will take losses, but write those off as business costs.  Middle class will pay with government austerity measures.  History repeats.  

You really think up up to a 70% correction is coming? If a $2 million place suddenly went on the market for $600k, it would sit on the market?