Monthly Archives: March 2011

‘The Rent Is Too Damn High PARTY’ – “Every day more and more good folks are being forced to leave as affordable homes get torn down to make way for million dollar condos and the transformation of this city into a resort city for only the rich.”

From Gord via e-mail, found on facebook [Thanks Gord].
Conrad Schmidt is the head of the Work Less Party, “known for co-organizing parties in East Van with political overtones”:

The Rent is Too Damn High PARTY

Friday at 21:00 – 12 March at 02:00

Commercial Drive Legion

Created by:

More info

Featuring funky fresh tunes from….

– Freeflow
– Timothy Wisdom
– Dakk vs Slice

Saucy, Scintillating Burlesque Performances from:
– Roxette Starr
– Vermillion Viper

-and your MC for the evening, Mr Chris Masson

As with any Revelry party, good times abound! But best of all at the end of the party, the profits from the event go to helping out some needy friends. Folks who can’t pay rent that month or who are a struggling, toss your name into Andrea’s Hat of Good Fortune. If your name is drawn, the PROFITS FROM THE EVENT GO TO HELPING YOU OUT WITH YOUR RENT! Read below for how our happy hat will work.

The Legion Hall, 2205 Commercial Drive

Friday March 11th


Vancouver has become they most unaffordable city in the English speaking world despite a 1.5% increase in unemployment this year. Every day more and more good folks are being forced to leave as affordable homes get torn down to make way for million dollar condos and the transformation of this city into a resort city for only the rich.

–Rules of Andrea’s Happy Hat–
The Max that can go to any single person is $400. If profits are greater than that, the remaining cash goes to successive drawees.
This is an honor based system, please only throw your name into Andrea’s Happy Hat if you are truly havin a bad rent month.

Please help support this event by sharing this facebook link with as many folks as possible.

++Brought to you by the Revelry Society++

Perverse Markets Cause Misallocation Of Efforts – Young 31 yr old Couple; Two Kids; Finances Under Pressure; Considering Moving; Higher Risk Investments Become Priority Over Careers

zzz at March 9th, 2011 at 5:09 am– [in response to a comment “wow, renters must be sitting on a giant pile of money waiting to swoop in and cash in”]
“Given up on that. Age 31, married with two kids under 3. Family finances coming under pressure. Expenses rising steadily, no wage improvement, job change imminent. We could be moving. Savings are a huge buffer but they’re losing value. We’re changing our plan and switching to active investment. Long term investment returns are priority #1, careers are #2, and Canadian real estate is off the radar.
Renting something acceptable is less than 30% of the cost of buying somebody’s fucked up reno here in the Fraser Valley. Buying my current rental with cash would yield under 4%, a poor return for an asset that depreciates. Like it or not, houses are an investment and at these prices they are a poor one. They are also illiquid and the risk is extreme given our obscene levels of mortgage debt and leverage.
No real problems here, but maximum uncertainty. It really shouldn’t be this way, but people here are just house crazy. I’ve got a relative with multiple properties holding out for a return to peak prices in the interior, others nearing retirement and 500k in debt, and a young family with 3 properties. They paid off their residence and then bought two in a year.
So yeah, the market is hot. Buy and hold :) People are playing monopoly with free debt. Thanks BoC!”

A couple of thoughts:

1. Note how distracting the current environment is to this young couple:
(a) they may move because of the housing market,
(b) they see ‘long term investment returns’ as higher priority than their careers. (It is likely that the ‘fast-and-loose’ milieu, with individuals around them making unnatural gains in the RE markets, is persuading them they have to take on more risk elsewhere.)
This bodes poorly for our community. We would be far better off if couples in this position were happy with affordable accommodation, and if they could concentrate on using their skills and talents to add to their own wealth by being useful in our society. Misallocation of resources, times two.

2. This is, in our humble opinion, a very poor time for a part-time investor to be shifting to ‘active investment’ (unless ‘zzz’ means considering short positions, which would not be a common idea at this juncture). A two year equity bull is about to turn: it is now sucking in the retail investor during a distribution phase. After retail investors took a record amount out of funds in 2010, a record amount of retail money is coming back in 2011 Q1, just in time for the smart money to sell to the man in the street. The little guy is about to get screwed, AGAIN. This could result in a double (and particularly devastating) blow for ‘zzz’ and their family; we would respectfully urge caution (which is the opposite of the urge they are experiencing, namely, to take on more risk for the promise of higher returns).-vreaa

Vancouver Realtors Chat About Hot Market – “CRaZY”, “I got 11 calls while I was in yoga”, “Homes are hotcakes”, “Exhausting couple weeks and now I’m off to bait mice in my investment property”

#YVRREChat on twitter, 8 Mar 2011 9am-10am
Scott Dawson (Mortgage broker): “We’re 10 days away from the new mortgage rules coming into effect. Has anyone seen a rush in the market because of this?”
Leah Bach (Realtor): “absolutely CRaZY yesterday!!!”
SD: “Word is lenders are getting busier as well. Allow extra time for subjects if possible.”
Jamie Gale (Mortgage broker): “Absolute insanity! I had more re-fi requests this past week than I did all of February.”
LB: “I am not entirely sure it is do to the new mortgage rules. It just maybe the onset of the spring market.”
SD: “Spring is always busy I predict it will continue after the new rules too.”
LB: “I would agree. I got 11 calls while I was in yoga.”
Heather Stewart (Home-stager): “I’m hearing about lots of action from mortgage brokers this week…”
Gary Jones (Financial advisor): “I think we are going to see an oozing bubble. No giant drops but small decreases.”
SD: “I’ve never heard the term ‘oozing bubble’.” [That makes two of us… bubbles never ‘ooze’, they implode. -ed.]
GJ: “Of the busy calls how many of them are buyers and sellers? Or just people concerned about new rules?”
SD: “I’m not currently working with clients that are impacted by the new mortgage rules.”
TMB Realtors (3 realtors): “The 5 year qualify seems to me to be a larger hurdle than 30 year amortization. Was that a big adjustment?”
SD: “I would say the qualifying rate has had a bigger effect than the 30 yr amortizations.”
Jeff Poh (Realtor, Burnaby): “I slept in, exhausting couple weeks and now I’m off to bait mice in my investment property, yay :/”
Andrew Hudson (Realtor, Metro Vancouver): “In my hood, homes are hotcakes. A week is a long time on the market right now.”
Rossana Wyatt (Mortgage broker, London, Ontario): “Wow, amazing. Not here.”
AH: “Mostly (almost exclusively) Chinese buyers. I think it was Pasquale Sasso [Richmond Realtor] looking for a Chinese translator last week.”
Mark Attar (‘Property management’): “There was an interesting story in the Sun or Prov yesterday about Chinese gov restricting spec causing our market to gain.”

Richmond – “‘Investor’ driven”; “It has become too expensive for ordinary people that live and work in this community.”

Excerpts from article and video: ‘Richmond home prices skyrocket’, CBC News, 6 Mar 2011
“The median price for a detached home in the Garden City is now hovering just above the $1-million mark, up from $885,000 just six months ago.

Patsy Hui, a Richmond real estate agent, said although it is “such a lovely place,” it’s not the inherent beauty of Richmond that’s driving prices: It’s the investors. “All kinds of people, but mostly people originated from mainland China,” Hui said. The prices may seem high to us, she added, but present a “Real deal… real deal from world point of view.” One home that sold last year for $1.2 million brought $1.73 million this year.

Ivan Krpan, who makes custom-built homes in Richmond, says more than 80 per cent of his clients are from mainland China and that most buy older houses and knock them down. He said the surge in demand has “Certainly pushed a lot of Richmondites out of Richmond” – “It became very attractive for them to make some extra money on the properties, on the values and move to the Valley, to White Rock and south Surrey. It has become too expensive for ordinary people that live and work in this community.”

We all know the metrics. Why not call the ‘investors’ what they are?: Speculators betting on higher.. much higher… prices. -vreaa

“According to this message, I should basically get out of town, along with everyone else who makes a decent dual-income salary.”

pricedoutfornow at March 7th, 2011 at 7:13 pm
“On CBC radio this afternoon they interviewed a realtor to talk about the HAM [‘Hot Asian Money’] phenomenon in Richmond and Vancouver-westside. The radio host sounded downright sad when she said “But this means that young people basically won’t be able to buy houses in Vancouver or Richmond anymore?” And the realtor said “Yes, that’s about right. They will have to go to the suburbs” to which she responded “But Richmond IS a suburb!” And the realtor giggled and said “Ya well I meant the EASTERN suburbs”.
So according to this message, I should basically get out of town, along with everyone else who makes a decent dual-income salary. And great, let’s blame the Chinese! This is bad for Vancouver, when Canadians are basically told outright to leave if we want a house.
Of course there’s no talk of the fact that people have been bidding up properties for YEARS with cheap money and loose credit. Who really cares about the prices going up $200k in the past 4 months? What about prices more than doubling in the last ten??”

Sentiment – “It seems that here a million is worth practically nothing, and it makes me sooo mad!!!”

‘Indeed…’ at March 3rd, 2011 at 7:50 am“As much as I dislike (actually HATE) to admit it, the houses on the West Side get sold like they were dime a dozen. I feel like screaming from the top of my lungs…. Who are these people who are shelling millions of dollars for houses here? – in this medium sized town, with no culture, no decent roads, no companies’ headquarters (other than Lululemon), pathetic and criminally bad quality of construction? Why are they paying so much money? It seems that only here a million is worth practically nothing, and it makes me sooo mad!!!”

Australian Business Magazine Asks “Is Canadian Housing The Next Domino?”

Excerpts from 2 Mar 2011
“Canadian home values have risen strongly relative to incomes and rents over the past ten years on the back of sharply rising debt levels.”
“Canada’s central bank and government provided significant stimulus to the housing market. In addition to the Bank of Canada lowering interest rates to record lows, the government significantly loosened mortgage eligibility criteria, culminating in the introduction of the zero-deposit, 40-year mortgage in 2007. Further, the amount that Canadians could borrow was increased, with many individuals in 2009 being granted loans in the $C500,000 to $C800,000 range, provided their household income ranged from $C110,000 to $C170,000.
Finally, in an effort to support the housing market in 2008 (when affordability fell sharply and the economy stalled), the Canadian government directed the Canadian Mortgage and Housing Corporation – the government-owned guarantor of high loan-to-value-ratio mortgages – to approve as many high-risk borrowers as possible in order to keep credit flowing. As a result, the approval rate for these risky loans went from 33 per cent in 2007 to 42 per cent in 2008. By mid-2007, the average Canadian home buyer who took out a mortgage had only 6 per cent equity in their home, suggesting the risk of negative equity is high even if there is only a moderate correction.”

Anybody At Global BC TV Still Consider Themselves A ‘Journalist’? – Another RE Infomercial Run As ‘News’

Global BC TV ran another shameless real estate infomercial as news, arguably even more blatantly obvious RE touting than the very recent ‘Helicopter Cam’ [9 Feb 2011] and ‘Burnaby Line-Up’ [16 Feb 2011] incidents.
‘Village on False Creek’s First Buyer’, [4 Mar 2011], is a breathless account of a 27 year old moving into a 700sqft ground-floor Olympic Village condo. The attention to realtor-type detail in the piece is enough to make even the most bald-faced  salesman blush: the buyer is a ‘happy homeowner’, the site is better than others in the city, a non-view is a ‘view’, the non-view is safe from further obstructing buildings, the condo is ‘bright’, the small spaces are ‘spacious’, prices have been ‘slashed’, just look at each & every one of the shiny appliances, the high ceilings, etc, etc.
The piece offers some wonderful laughs for the discerning viewer, but don’t let that distract you. This perversion of programming, with selling masquerading as ‘news’, is serious stuff. We archive it here in all its mundane and agonizing glory, for the record.
Anybody at Global still consider themselves a ‘journalist’? – vreaa

Announcer: “When condo king Bob Rennie remarketed the village recently and lowered the prices, nearly half of the available units sold out. [Hahaha: ‘Half the units sold out’ = oxymoron. -ed.Today, the first of those new buyers moved in.”

[Image removed at Christy Zettl’s request, 28 Feb 2013]

[Image removed at Christy Zettl’s request, 28 Feb 2013]

John L. Daly, Reporter: “She’s a happy home-owner… a 27 year old homeopath who’s now unpacking at her brand new condo at ‘The Village at False Creek’, formerly the ‘Olympic Village’. She’s the first to buy in and move in after the prices were slashed.”

[Image removed at Christy Zettl’s request, 28 Feb 2013]

Christy Zettl, Olympic Village Condo Owner: “I am ‘number one’, yes, big day today.”

[Image removed at Christy Zettl’s request, 28 Feb 2013]

Christy Zettl: “For what you are paying and then the type of accommodation that they have, it’s probably the best in the city. Uhm… we looked at a lot of places in the West-end, on Denman, on Beach, and, you know, for what you were getting for the space, for the location, there’s not even comparable.” [We’ll just have to guess what is meant here because, taken literally, it makes no sense. -ed.]

[Image removed at Christy Zettl’s request, 28 Feb 2013]

Christy Zettl: “I like the high ceilings, and the big windows, and you can see through the water through/out the door [sic]”

[Image removed at Christy Zettl’s request, 28 Feb 2013]

John Daly: “She has a view through the Community Centre to the water. [Not making this up, folks. -ed.] The good news is there is virtually no chance that anyone can build a new building in front of her, here on False Creek.” [One building is enough, already. -ed.]

[Brief bridging section inserted here on building in another area of downtown that will obscure neighbours’ views.]

John Daly: “…not an issue for Christy, whose bright condo in the Kayak Building sits right on the street across from the Community Centre. She says she’s not allowed to say what she paid for it, but…:”
Christy Zettl: “It was reduced probably about 30% from the original price.. so if it went for full price there’s no way I would have been able to afford to move here (smiles).”

[Image removed at Christy Zettl’s request, 28 Feb 2013]

John Daly: “The 700sqft unit has one bedroom,…

“a utility room,…

“a modern washer drier combo,…

“a relatively spacious wash-and-bath-room [sic],…

“And built in fridge,..

[Image removed at Christy Zettl’s request, 28 Feb 2013]


“and convection oven,…

“topped with a gas range.”

[Here there is a demonstration of the impressive gas-range lighting capacity]:

Reporter John Daly, (who perhaps used to consider himself a journalist but by now must be feeling like this guy)…

…continues: “As well as possibly one hot part of Olympic history:”

[Image removed at Christy Zettl’s request, 28 Feb 2013]

Christy Zettl: “It’s unconfirmed, but apparently Sidney Crosby might have been staying in this apartment, so… I just found out about a minute ago… that’s quite exciting!… (laughs)…”

[Image removed at Christy Zettl’s request, 28 Feb 2013]

John Daly: “After looking all over town, Christy’s family is very pleased to see her settle down in what was once the ‘Olympic Village’… now, ‘The Village at False Creek’.” [In case you missed the new brand name when we mentioned it a minute ago. -ed]

“I grew up in the West End, and, while it has always been a transitional neighbourhood, it’s sad to see it the way it is right now.”

Ricky in the comment section of ‘Vancouver’s Downtown Chases out Kids’, The Tyee, 2 Mar 2011“I grew up in the West End, and, while it has always been a transitional neighborhood, it’s sad to see it the way it is right now. The two remaining pillars of culture there are the gay community and a surprisingly lasting Korean community, both of which are insular and provide no children. The working class is gone, off to Surrey or elsewhere, and unlike previous generations, no new round of city-dwelling working class immigrants are there to take their place, just dumb yuppies willing to pay the outrageous rents.
I remember a few years ago sitting at the new Starbucks at Denman and Davie when some neighborhood kids walked by on the way to the beach, making some noise as teenagers do. The yuppie harpies with their Ontario accents at the next table commented, “Look at that. The should ban these yahoos from coming in from Surrey or wherever they’re from.”


A preparatory post. This archive post will be updated, below, with a list of future quotes from industry spokesmen, media commentators, realtors, blog commenters, citizens, etc, claiming that the implosion of the Vancouver RE bubble couldn’t possibly have been predicted. We’re setting it up here, before the fact, as that’ll add to the irony. As VHB (Vancouver Housing Blogger) recently suggested at VCI (, special points for the first reader to spot such a quote. Extra points if the quotee is already on record as being an active bubble-denier.
This post will be linkable from the sidebar, and will be updated with quotes as they start pouring in. (No, we have no idea when, just that they will.)

Hoocoodanode? Quotes:

1. [pending]

Krugman “Very Worried” About Canadian Housing and Household Debt

Paul Krugman, NYTimes, 4 Mar 2011“My take on the US economic crisis has increasingly been that … the housing bubble and household debt are the key players. If I take that seriously, I should be very worried about Canada.”

The brief article includes the following charts –

“As a fairly new resident from the UK I am completely flabbergasted at the prices in Vancouver. Even though I arrived with a reasonable lump sum, I’m not able to make a dent in a reasonably sized property within the city.”

fordinho comment in Vancouver Sun 3 Mar 2011 7:42pm“As a fairly new resident (from the UK) I am completely flabbergasted at the prices in Vancouver, and even though I came across with a reasonable lump sum of finance, I’m not able to make a dent in a reasonably sized property within the city.
Again as a novice, it does appear to me that the whole market is artificially inflated by foreign investors pumping their money into properties (funds gained through whatever means) but I do have a question – does anyone know whether there are any restrictions in doing this? Surely you cannot buy any untold amount of properties in Canada (while residing in another country and having no intention of ever living here) to use purely as an investment tool?”

Capital Economics Report – “Canadians now believe the economy is invincible. This level of hubris is disconcerting. Housing valuations have lost all touch with fundamentals, driven up by a massive surge in household debt.”

Capital Economics on the Canadian economy: Housing downturn to hit hard, a study from ‘Capital Economics’ (Toronto; London, UK; & Singapore), released 23 Feb 2011, has already been extensively discussed by Ben at financialinsights.
We archive the overview of the Capital Economics report here, for the headline bubble record. :
“Because Canada emerged from the global financial crisis largely unaffected, many Canadians now appear to believe that the economy is somehow invincible. This level of hubris is disconcerting when housing valuations have lost all touch with the fundamentals, driven up by a massive surge in household debt. We’ve seen this story played out in countless other countries and it never has a happy ending. The now inevitable downturn in the housing sector will severely constrain economic growth over the next couple of years, as consumption expands at a more muted pace and housing investment shrinks back towards a more normal size.”

This kind of strong language and equally strong bearish predictions regarding the Canadian RE markets was, up until recently, confined to blogs. Increasingly,  mainstream commentators are recognizing the bubble, and describing the animal spirits of the mania. -vreaa

“A home inspector who is having TONS of work in White Rock recently, whereas he barely ever made it out there before. Asian buyers, Higher end of the market, $1MM+.”

Devore at February 28th, 2011 at 5:33 pm“Had lunch with friends today, ran into a home inspector who joined us. Is having TONS of work in White Rock recently, for Asian buyers, whereas he barely ever made it out there before. Higher end of the market, $1MM+, not the stuff for us regular riff raff. After the RE rules changes in China, I wouldn’t be at all surprised HAM [‘Hot Asian Money’ -ed.] is pouring into wherever it is allowed to, including the nicer areas of LML. Anyways, never meets the buyers, maybe the realtor or the son (driving around in a Porsche of course). Meanwhile, the lower end of the market, and outlying areas (not Van, Richmond or White Rock apparently) is quiet at best.”

Young Siblings Buy UBC Condo; With Help From Petroleum Engineer Dad

“Siblings Bayan, 21, and Roya, 18, Bennett grew up in Qatar, Thailand, Venezuela, and Canada. The nomads have alighted at UBC to continue their post-secondary education—Bayan, his third year of biomedical engineering; Roya, her second year of an arts degree. Uninterested in cramped (mono-sex) student residences, they opted for a condo in the campus’s new village.
The Bennetts looked at 10 other places around town, including a spot kitty-corner to the fraternity houses, before settling on an 856-square-foot condo in the Pacific Spirit development. 5928 Birney Avenue; $655,000.
[$765 per sqft; land is leased]
They liked the water feature out front and generous patio in the back. With financial assistance from their father, a petroleum engineer, the siblings moved in at the end of July. With classes in full swing, Bayan and Roya haven’t had time to decorate the two-bedroom, two-bath unit. “It’s still kind of a mess.”
– from ‘UBC’s South Campus: A residential neighborhood is springing up in the heart of the UBC campus’, 1 Oct 2010, Vancouver Magazine

“I grew up in a multi-ethnic, working/middle class part of Vancouver.”… Real Jobs; Common Understanding… Cold City Now… “Even if prices come down, we will be surrounded by miserable, indebted fools.”

Mike at VREAA 27 Feb 2011 3:37pm
“I grew up in a multi-ethnic, working/middle class part of Vancouver. Most people were immigrants but they mixed. Children were fluently English and parents were doing their best to learn. There was some sort of common understanding that is missing today. Racism was discouraged because people were just trying to get along, not because it was politically incorrect. Now there are cultural barriers everywhere I look.
People had real jobs back then, too. There was industry in this city even if it wasn’t globally important. Now if an industry tried to open, the condo owners would chase it away.
Children played on the block and parents knew each other to some extent. Now they ride in the SUV to school and back.
This is a cold city now. Even if prices come down, we will be surrounded by miserable, indebted fools. Unless you can somehow isolate yourself from the misery, you will feel it. And you don’t really want to isolate yourself. Time to leave…”

“Many YVR indigenes have acquiesced… Opted out, packed up, moved on…”

Nemesis at VREAA 27 Feb 2011 6:16pm
“Somewhere along the way our happy go lucky beer drinking, hewers of wood/drawers of water market economy transmogrified into the financialized market society of condohype and anomie… with all it’s attendant ills.
My childhood Burnaby home (similar to the over-ask Dunbar ‘tear down’ recently featured here @ VREAA) was razed to the ground and replaced with a wedding cake architecture/monster house… and then the brewery I worked at while attending college was demolished – the site is only now being redeveloped as a, “vibrant, walkable urban community destined to include almost 1.4 million square feet of retail, commercial, health and residential space.”…
Prior to that my Fraser Valley army base was sold and unsuccessfully marketed as a new housing development… and even my FantasyIsland (yes, that’s what we used to call Esquimalt/Victoria, “De plane, Boss! De Plane!”) based frigates were scuttled and turned into aquatic tourist attractions…
And subsequently (shortly after my 80′s tenure in the globalpixferbuxbiz) – even the Vancouver operations of my two largest domestic industrial clients – one a railway the other a manufacturer of heavy equipment/industrial plant for the forest industry) were razed to make way for… I think you can guess…
Which is probably why so many YVR indigenes have acquiesced… Opted out, packed up, moved on (especially those whose roots/origins afford them a longitudinal/historical perspective on the city’s evolution) …
Well, as strategies go – I can’t deny that it worked for me. But for Xiào necessitating my return in 2005 I would undoubtedly be somewhere else. Indeed, one day, when I am no longer needed here – somewhere else is where I’ll be. Caracas???”

52% Backed By Real Estate – Analysis Of Contributions To Campaign Of Christy Clark, New Leader of the BC Liberals

Who influences our political leaders?

Here follows the results of an analysis of the sources of campaign donations to Christy Clark, new leader of the BC Liberal Party.
(Thanks to ‘Nemesis’ [at VREAA 27 Feb 2011] for the list [pdf here].)

Each source was researched online, and classified by industry type, as best as possible based on available information.
Results were analyzed by number of contributors, and by dollar amounts.
Businesses classified as real estate related were developers, contractors, construction, property managers, realtors, and RE marketers.
A minority of sources (21 of 147) could not be reliably classified (for instance numbered or named corporations with no online presence, or individuals whose industry affiliations could not be ascertained) and they are classified accordingly.

Total contributions: $513,200*
Total number of contributors: 147*
[*For the sake of this analysis, we have removed the single line item ’55 donations under $250′ and the $5,840 that they contributed.]

Contributors & contributions by group:

A. Contributor known to be affiliated primarily with RE related industry:
(i) Number: 46/147
(ii) Dollar amount: $267,250

B. Contributor known to be affiliated primarily with industry that is not RE related:
(i) Number: 80/147
(ii) Dollar amount: $212,300

C. Contributors where industry affiliation cannot be ascertained:
(i) Number: 21/147
(ii) Dollar amount: $33,650

Percentage of known industry affiliated contributions coming from contributors with known RE affiliation:  55.7% ($267,250 of $479,550)

Percentage of all contributions coming from contributors with known RE industry affiliation:  52.1% ($267,250 of $513,200)

We anticipated that the RE-affiliated portion would be large, but 52% is substantially larger than we expected, very much more than the percentage of our GDP made up by directly RE-related industry (20-22%, we believe).
Powerful vested interests means ongoing misallocation of resources.
The provincial and municipal governments will likely continue to do everything possible to perpetuate the speculative mania in Vancouver’s housing markets.