“I was just in Switzerland. Max 50% foreign ownership in any development. Funny how each ad states ‘foreign ownership allowed’! Often takes 2 yrs to build a house. Tons of red tape. Many never sell their houses, just rent out. Up to 70% of neighbourhoods rented. Also takes yrs to get into great neighbourhoods. We stayed with two architects there. Fascinating place.
The one thing that throws me in Van are the rents. I think more people would be foreclosing condos ‘cept the rent & tenants in abundance. I cant believe people paying $1700 for a 1 bed on a busy street. Some maxed-out owners should thank their lucky stars at the $$ they are getting. Could be a lot uglier.”
- thinktom (a local realtor), at RE Talks, 30 Sep 2011 9:04pm
Rents will drop during the coming implosion of the speculative mania. They will fall in proportion to the impact of the bubble-burst on our local economy. This will reduce the fundamental ‘floor’ underneath RE prices, which currently stands at 50% below market value, or even lower.
Interesting to see a realtor talking about “maxed-out owners”. – vreaa
Obviousl this guy is not passionate about his job and Vancouver
I think someone should report this to the RE board and have him in for a displinary hearing and re-education!
Hey the rent is what it is. My bet is there were 20 couples lined up to let it. Another product of lifestyle and wage pressure colliding.
The same place in Toronto would probably go for $2500/mo
Who the hell pays $1700 for a 1 bed on any street? With the exception of town houses or very high end condos I cant see anyone paying that. A friend has a 1 bed condo on the 15th floor in Yaletown. Has a gym and rec room, and a storage type room (the result of lazy archetecture) that could almost be a second bedroom except it lacks the necessary window and closet as well as a few extra square feet. All the usual stuff, granite and stainless everything, built in the last 5 years. The rent? 1300, which he thinks is a lot, but he likes living downtown.
It will be interesting to see what happens to rents as prices fall since any investor who bought in the last 5 years probably cant afford to drop the rent, but the closer renting and owning come in price the more renters will jump to ownership. Then again owners who bail on their place will add to the renter pool, so rents might not drop that much.
$1300 is a lot for a Yaletown condo? It’s time to enter reality, whether you agree with reality or not is irrelevant.
In very general terms, my experience suggests that if you’re paying >$2.25/sqft/mo to rent any space in Vancouver proper today, you can probably do better. Heck, with even minimal searching you can find something great under $2/sqft.
Just curious: I’ve seen previous discussion of good vs. bad landlords and the value of stability to renters here. What (if any) is the premium associated with living in a building owned and run by one of the larger rental property companies (Dorset, Balfour, etc.)? Are you better off with one of them than trying to sort out whether your amateur/small-time landlord is going to be worth the hassle?
I got back from Germany last week and rents in the parts of Germany that I visited were better value than what you get in Vancouver. More space, more family friendly apartments, and sometimes cheaper. One was a giant apartment in Brelin-Charlottenburg for 1600 euros per month, it would easily occupy half of floor in a typical yale town condo tower. I have no idea if what I saw was typically of the rest of germany.
Germany… try London UK — “pound for pound” rents are better than Vancouver’s, as long as you don’t mind being a block away from the high street and two blocks from the nearest underground line in a middle class neighbourhood.
With all due respect, there is no “block” in London, nor Germany nor anywhere in Europe. This is an American concept. I remember looking very stupid in 2006, shortly after crossing the Atlantic Ocean, when I shamefully asked “what’s a block?” to a school friend who told me he was living “a few blocks away”. His expression was priceless…
I’ve run into this too, but I can easily give instructions to another American/Canadian, in Europe, and they find their way just fine. The concept exists, the term does not. (barring a maze of diagonal streets, which can also be just as true in Boston)
“there is no “block” in London”
I am not from Europe, as I’m guessing is most of the audience. I can rephrase to state “less than 3 minutes’ walk from…”
you people have never been to milton keynes
“you people have never been to milton keynes”…
Wannabet? Don’t ask. Something to do with EducatingRita.
Comparison with the UKP is obviously more favorable with today’s exchange rate. Wait until the dollar returns to $2.30/UKP.
“there is no “block” in London”
Brits measure in pubs. As is, “you drive down here past three pubs luv, then it’ll be on yer right.”
Sadly even pubs have gone corporate over there now and consolidated holdings so there are fewer of them. Tragedy.
I once gave someone directions in Toronto thusly: Go up three Starbucks and then the Ethiopian place is on the next little street on the left.
$1700 for a 1bdrm? I don’t believe that. Only a very stupid person would pay that. I live downtown and I am paying $1100 for a large one bedroom with ocean view and a parking space.
I’m paying $1550 for a months old apt. in Mt. Pleasant with in-suite laundry and an underground parking spot. I was paying the same (by current exchange rates) for a 300sqft 1 bedroom in London, near Chiswick.
You mean GBP1550 or converted to CAD?
no, roughly 900GBP/month
$1700 seems kind of steep for a one bed. I rent a 2 bed, 2 bath for $1350 (and rent didn’t increase this year, yippee!). Someone in our building had a 1 bed plus den for $1400 and it sat unrented for months. Mind you, I don’t live in Yaletown or downtown.
Rents may fall initially, but then they will rise again. Banks don’t want to be in the landlord business. Until prices fall (or rent rises) to a reasonable ratio for a sane investor, the rent situation will deteriorate as properties fall into REO.
Well, if Van is going to follow Cali, that is. Which I think it will.
Not if the bank can’t sell it for a long time. In such cases, it would be better to hire a property managment company to rent it out and collect some rent in the mean time. Getting say $1000/month on a place for 6 months is better than having it sitting empty for 6 months while paying property taxes and strata fees.
It would make sense, but it is so far from their core business that they won’t. And having renters in place encumbers the property. And, worst of all, prevents them from crying to the government for a bailout.
I wouldn’t hold my breath… Yeah rents might fall a little due to lack of economic growth, but at the end of the day a crisis in housing equals more people interested in renting a place vs trying to catch the proverbial falling knife. Prudent renters will be the new media catch phrase.
And those new renters will just magically appear out of thin air? Chances are most of those new renters will be former owners who dwellings are now empty. As well, in economic hardtimes, household formation slows are single people are less likely to leave the nest while couples might move back in with parents, more single people pair up in roommates to reduce housing costs, etc.
The problem with US is that a lot of the houses are being held off the market and not rented out for whatever reason. This may be due because banks don’t want to rent out the houses because they can get more $$ from the bailout programs, or there is a lack of quality tenants or any tenants. It is not necessarily a given that rents will go up in a housing bust, especially if there is no income to pay for it.
“prudent renter”
This is a new one for my oxymoron dictionary
Yeah, because renters are all “throwing away money” by “paying somebody else’s mortgage”.
- phrases from the dictionary of real estate clichés
“Prudent renters”.
Foolish me. And I thought it was all about ‘wearing protection’* when your LandLord came calling.
*UnintentionalLandLords being notoriously.. ah… ‘easy’/'not so choosy’/'accomodating’/'flexible’/'needy’/constantly suffering from SeparationAnxiety? [or insert your own fave euphemism]. NoteToEd: If ever sanity should desert me and I succumb to tempation – and I’m talking the PlasticFantastic (sails & all) not Bricks’nMortar – I’ll buy the HunterCC45 that’s been languishing in FalseCreek for well over a year (currently emblazoned, “Inflection” – but I’ll risk the wrath of Neptune and rename her, “Innuendo”). It just works on so many levels (e.g. imagine challenging Rennie et al if ever he decided to take up YachtRacing/SailorSuits; the RVYC RaceWeekNews would never be the same!). Ok, that’s all you get after 2 Grigios.
Worst comment yet, troll. New low for trolling. Try harder.
I’m glad this blog exists so we can document your particular kind of only-in- Van delusion.
That’s the thing about Vancouver – impossible to get ahead. I was so happy when I left so that I could buy a house for less than half of what I was paying in monthly rent at all those stinky leakers on the west side. I know people that are nearing 50 yrs old and still moving every year because of envelope work, over-leveraged 25 yr old landlords that haven’t a clue nor a spare cent to fix anything, and experienced landlords that try to shaft you at every turn and can’t make the commitment of a long term lease or break the lease in a panic because they need to do renos before selling. What a flipping hassle! Renting apartments in Paris and Tokyo was easier and a more enjoyable experience – and no more expensive if you can believe it!
“What a flipping hassle! Renting apartments in Paris and Tokyo was easier and a more enjoyable experience – and no more expensive if you can believe it!”
I can believe it. Too many amateur newbie landlords looking to make a fortune on flipping.
Rents go up when house prices go down as supply goes down (because no one is building)
Recessions are good for landlords too.
Plus in a non speculative market people don’t have the irrational desire to own a home at any cost
This is why it turned out to be a real boon to invest in REITs as the bust was hitting the U.S.
Check out this guy on reddit:
http://www.reddit.com/r/vancouver/comments/kylah/need_to_buy_a_home_in_vancouver/
Long story short, he’s got a wife and 3 kids and $150000 downpayment. He’s been approved for a $750k mortgage.
He’s just put an offer in on this: http://www.realtor.ca/PropertyDetails.aspx?&PropertyId=11067594&PidKey=-1739810916
With an amortization of 25 years, interest rate of 5%, his monthly payments will be $5300 a month.
I hope his wife/parents/in-laws are rich.
I read through the whole thread. Lots of “interesting” comments from bubble deniers…
matt -> Thanks for pointing out that reddit thread.
We believe it’s an example of guerrilla advertising.
We’ve headlined it 4 Oct 2011.
I’m not so sure rents will go up – we’re in an over-built supply situation. Watch out for a decline of “households” in the recession as people start sharing rental units. That will reduce housing/rental demand. Shared accommodation will take off as incomes decline and unemployment increases. This will probably hit Gen Y hard. Many Gen Ys seem to be livin’ large at the moment on cheap debt and jobs that evaporate quickly (construction trades, professional real estate related gigs).
It looks like we have a ton of over-leveraged owners who about about to be hit by a decline in renters. They’ll have to adjust rental rates to fill their units. Unless Canadian banks start evicting defaulting borrowers and create a new source of renters (like the USA). But I don’t see that happening here. CMHC will play “extend and pretend” (that loans are not underwater and extend amortizations and debt terms).
Listed rents are already high compared to wages (whereas paid rents are in line) – and if your rental population is paying substantially more than 40% of their gross income to housing it can crush a local economy. These things are dependant variables, and although tourism and offshore influx can make some difference in that level of dependence, you still need locals buying beer and getting their hair cut.