Monthly Archives: April 2008

Aggressive Lending In Canada – “My family was severely bugged by mortgage brokers recommending us to get a fatter mortgage.”

Easy lending has fueled the price run-ups in Vancouver RE. This relevant anecdote comes from dimon at Vancouver Condo Info 2008-04-29 15:04:35

“I’ve lived in Canada since 2001. When we started looking for a mortgage, the rules were quite strict. With our verified!!! dual income we could not get mortgage more than 200k. As first home buyers we needed at least 5% downpayment. Within this price range we could not find a suitable SFH, so we went for a townhome in decent area.
To my big surprise, just a year or so later, my family was severely bugged by mortgage brokers and financial advisors recommending us to get a fatter mortgage. And even our income did not change much, we were offered 400+k mortgage. I now feel lucky I did not go for it.”

“Anyone have relatives in Alberta that want a downtown condo?”

The Vancouver Sun article ’15 Real Estate Myths and Realities’ is getting an appropriate amount of coverage and an even more appropriate amount of criticism in the local blogosphere.

See the links at RE Talks, condohype, vancouvercondoinfo & the Sun itself for this discussion.

vreaa harvested this anecdote from ‘BUY MY CONDO!’ at Vancouver Sun ‘Soundoff!’ Tue, Apr 29, 08 at 01:05 AM

“I am selling a condo because I am getting transferred. When giving the listing out, my realtor tried to low ball me for a fast sale. I priced it competitively and less than recent sales on a lower floor. To date I have no offers and only excuses from my realtor that the market is slowing, that it is changing, there are more listings and that I need to reduce the price. I’ve paid property taxes, strata fees, mortgage payments and I have to pay a realtors commission so I don’t want to lose money on this purchase. I feel like I live in a different city than what was described in the article because people are not lining up to buy my place. The realtor tells me that it is too expensive for an owner user and investors want presales where they don’t have to pay for the condo for 3 years. Anyone have relatives in Alberta that want a downtown condo?”

“I have no problem being a renter in this ridiculously overpriced market.”

This from ‘wtm’ at RE Talks Wedn Apr 23, 2008 4:10pm

“I am renting in the West End, West of Denman in a “boring/somewhat unsightly walkup”. Common areas are nothing to write home about either….but I have a beautiful, approx 700 sq ft 2 BR for $1380 a month, which includes heat, hot water and covered, secure parking. I have hardwood floors and reno’d kitchen and bathroom. The suite is very very clean and quiet. Owner’s have live-in landlord couple who take care of every little problem within a couple of hours. Given the assumption that material capital gains in RE are off the table for at least the next 5-7 years (this is my view), there is no way it makes sense to buy when I can rent on a tree lined street in a beautiful quiet neighbourhood, a couple of blocks from the beach and Stanley Park, for such a low monthly cost. No taxes, no strata fee, no unexpected costs or assessments. When I can get in the market, in this neighbourhood, for something less than $375 a sq ft, that is when I will consider buying (I think that is possible btw, but will take 3-4 years of downward price drift). In the meantime I am saving and investing…..I have no problem being a renter in this ridiculously overpriced market.”

The Down Side Of Having A Tenant ‘Pay Your Mortgage’

This gem from Lady Luck at RE Talks, Tue Apr 22, 2008 9:29am
“We used to rent a suite in our home. A new tenant came home blind drunk. Let himself into our part of the house (door was unlocked). I went to check on the baby at 3am. He was passed out on her bedroom floor, had vomited and pissed his pants. I recognised who it was and called the police. They ran his name and it turned out there was a warrant out for his arrest. Police came with guns drawn and removed him from the house. We called the RTA and were told that this was not grounds for eviction. The police let him go the next day, he returned to the suite and physically threatened my husband. Luckily “Uncle” is a biker and brought a few buddies to pay him a visit. The tenant was convinced that it was not in his best interest to stick around. Since then we have never rented a suite in our home. I always lock my doors. And I always do a police record check on new tenants.”

Ownership Premium – “It can’t be all about money.”

This from asha at RE Talks Thu Apr 17, 2008 8:29am

“We bought at Christmas.
We sold our condo too early at the end of 06 in December, but what the hey!
We went walkabout for a year and watched as prices climbed and climbed.
But we were buying a smaller cheaper house in a small town.
So we bought a nice 1950’s home in Powell River. 2000 square feet, a nice backyard, some fruit trees and a view of the ocean.
We waited and waited for the downturn which didn’t happen during that time and then stumbled upon this house which was just the right one for us.
Because it is cheaper it seems that it all works out. We could have made more money, we could have saved more money, but i have learned that is you are buying for your home timing the market is probably not worth it.
We got a great place out of it and in the end, it can’t be all about money.”

“The disparity between the the cost of owning and the cost of renting is worse than it has ever been.”

This story of a renter (who could be an owner but chooses not to) from Markoz at 2008-04-12 07:01:05

“One stat I found very interesting is “shelter cost to income ratio” (STIR) which they split between renters and owners. Curiously, in Vancouver from 1990-2001 owners spent an average of 20% of their income on shelter while renters spent an average of 30%. Presumably this is due to the fact that average owners make (a lot) more money than average renters. Anecdotally, anytime I personally have considered getting into the market my STIR would have increased dramatically. Due to my income, I guess I am not an average renter. It has always been the huge disparity between the cost of owning and the cost of renting that has deterred me. (That, and shoddy workmanship/design). Currently that disparity between the the cost of owning and the cost of renting is worse than it has ever been. I rent an old house just west of Main for $2050 per month. A virtually identical property just 2 doors down recently sold for $700,000. With 10% down my mortgage payments and property tax would be $4,335 per month (based on 6% and a 25 year term). The house is over 50 years old and will soon need a new sewer line (already cost estimated by a plumber at $4,200) and roof. We are in the midst (end?) of an unprecedented run up in house prices but owning has always seemed to me to command a much greater premium in Vancouver than other cities I have read about.

Will be archived here: 09. Delaying Buying (archive)

“He stared at me like I was one of those weirdos”

This from pricedoutfornow at 2008-04-08 19:11:57

“It won’t crash here. This is Vancouver. We are different. So said my co-worker today at work. I said “oh ya? they said that in Florida too. And California. And Spain. Because “everyone wants to live in (fill in the blank)” He looked bewildered and stared at me like I was one of those weirdos seen talking to themselves on the Skytrain.”

Will be archived under 01. He said, She said, I said (archive).