“We ended up stretching. We went a bit beyond our means.” – ‘Mortgage helpers’ mainstream in Vancouver

“When Caitlin Dowling and her husband Dave Knight bought their house at Fraser and 10th about a year ago, they wound up going over budget — like just about every purchaser these days in the city’s red hot real estate market.They had to choose between a house that offered rental opportunities or a smaller townhouse, and chose the former.“We ended up stretching,” Dowling said in an interview. “We went a bit beyond our means.” To cover the gap, they hopped on what seems to be a growing bandwagon: they rented the top floor of their house through the short-term online rental site Airbnb.Since starting to take in visitors around the beginning of March, she estimates they have pulled in roughly $2,000 a month to help cover $2,500-a-month mortgage payments.The couple is not alone. A poll conducted by an insurance company found that 43 per cent of Vancouverites who own houses are renting basement suites, laneway homes or other parts of their residences.”

– Vancouver Sun, 25 August 2015,
via Mortgage helpers go mainstream in Vancouver.

Barbara Yaffe: Stephen Harper’s housing affordability plan not suited to Vancouver market

Stephen Harper’s housing affordability plan not suited to Vancouver market. Barbara Yaffe, Vancouver Sun, 20 Aug 2015.

Toronto home prices soar (but they ‘won the lottery’ in Vancouver) – The Globe and Mail

“The benchmark price for all types of properties in the Vancouver area now stands at $700,500, up 11.2 per cent from a year earlier.”
– 6 Aug 2015 Toronto home prices soar (but they ‘won the lottery’ in Vancouver) – The Globe and Mail.

Calling Stephen Hawking! A new Space-Time-Price Continuum has been unveiled…!!
..in an environment with ‘no inflation’ and rock-bottom ’emergency’ interest rates (now in year 7+), another double-digit annual increase…
– ed.

Vancouver Sun: ‘Tinkering with housing market could be dangerous to economy’

Tinkering with housing market could be dangerous to economy.

“Vancouver’s Unaffordability Freak Show”

graph_2005-2015_0

“The situation ought to be clear to any reasonable person, boomer or millennial: Vancouver’s real estate market is now a world-class freak show.”

– chart and excerpt from ‘Vancouver’s housing crisis: No, not like before, and not like anywhere else (except Hong Kong)’, at Ian Young’s South China Morning Post blog, 3 Jun 2015 [hattip to Brian]

Ken Lum’s ‘Vancouver Especially’ – “Two of the city’s great crises: Homelessness and Obscene Real Estate Prices”

03_23_van_vancouverspecial_contributed

A man who appeared to be homeless offered to sell me a tiny house – actually a new art installation by Ken Lum, which I was looking at – for “a good price:” less than $1-million (which would be a good price, considering the tiny plot of land, on the edge of Vancouver’s Chinatown, is alone assessed at more than $1.7-million).

The exchange exemplified two of the city’s great crises: homelessness and its obscene real estate prices. Lum’s installation, Vancouver Especially, speaks very much to the latter. The work, with its faux brick and stucco, replicates the mass-produced, no-frills house known as a Vancouver Special, scaled to its 1973 property value ($45,000 – Lum’s production budget), then enlarged eightfold, because the installation would have been too small otherwise.

There’s a house-shaped cut-out in the base at the front that Lum says represents what $45,000 would buy today. Growing up in East Vancouver, Lum watched Vancouver Specials popping up everywhere. Built with working class and immigrant families in mind, what they lack in architectural significance they make up for in square footage – and are now out of reach for the common home buyer.

Beyond the obvious economic commentary, the work, at 271 Union St., addresses the transformation in this specific neighbourhood. “I find it shocking that Chinatown may lose its special, ethnic character,” says Lum, who now lives in Philadelphia.

– excerpted in total from ‘Ken Lum’s new art installation tackles Vancouver’s real estate crisis’, Marsha Lederman, The Globe and Mail, 2 Mar 2015
– images from metronews.ca, G&M, Vancouver Sun

rv-lumxxrv3

10833303

Art as a beacon of sanity in insane times.
Very well done, Ken Lum.
– vreaa

“Canada has the Most Overvalued Housing Market in World”

canada-housing-bubble

“In every inflating bubble, there’s usually two camps. The first group points out various metrics suggesting something is inherently unsustainable, while the second reiterates that this time, it is different.  …

On one side of the ring, we have The Economist, that came out last week saying Canada has the most overvalued housing market in the world. After crunching the data in housing markets in 26 nations, The Economist has determined that Canada’s property market is the most overvalued in terms of rent prices (+89%), and the third most overvalued in terms of incomes (+35%). They have mentioned in the past that the market has looked bubbly for some time, but finally Canada is officially at the top of their list. …

Just over a month ago, the IMF sounded a fresh alarm on Canada’s housing market by saying that household debt is well above that of other countries. Meanwhile, seven in ten mortgage lenders in Canada have expressed “concerns” that the real estate sector is in a bubble that could burst at any time. Deutsch Bank estimates the market is 63% overvalued and readily offers seven reasons why Canada is in trouble. Even hedge funds are starting to find ways to short the market in anticipation of an upcoming collapse. …

On the opposing side of the ring, who will contend that the Canadian housing market is just different this time? Hint: look to the banks and government.

Stephen Harper, Canada’s Prime Minister, has tried to dispel fears. He recently told a business audience in New York that he didn’t anticipate any housing crisis in Canada.

Just this week, the Bank of Canada also tried its best to deflate housing bubble fears. “We don’t believe we’re in a bubble,” says Stephen Poloz, the Bank’s Governor. “Our housing construction has stayed very much in line with our estimates of demographic demand.”

Poloz suggested that housing costs do not necessarily have to contract to match the incomes of Canadians. Instead, he expects growth in the economy to raise wages and make housing more affordable.

Strangely enough, by the Bank of Canada’s own estimate, the housing market is overvalued by as much as 30%. It is hard for housing to become more affordable when prices are rising in double digits in a year. Combine this with the fact that household debt rates keep setting new records, and one side of the fight might get tilted sooner than later.”

– from Jeff Desjardins, The Visual Capitalist, 1 May 2015