Monthly Archives: March 2012

A Weak March – Inventory High; Sales Low

Greater Vancouver RE inventory is now 16,298, a record historic high for the month of March.
Sales for March 2012 were 2,934 , down 28% YOY (cf Mar 2011), the second worse March sales for 10 years (second only to 2009).

– numbers and chart care of paulb, b5baxter, VHB, VMD, and others, at; noted here for the chronological record.
UPDATE regarding Detached properties
(from numbers posted at yattermatters):

Detached Prices:
(Mar 2012 $1.155M; Mar 2011 $1.155M)

Detached Inventory:
+22% YOY
(Mar 2012 6258; Mar 2011 5365)

Detached Sales:
-34% YOY
(Mar 2012 1187; Mar 2011 1799)

Bearish. – vreaa

“I am single have a awesome job in health care and OWN a condo that is not eating up my paycheques. Yes Surrey sucks but I am making good money and can walk to work in 5 min. from a condo I OWN.”

“You and that stupid girl are single, unemployed and miserable because you think so highly of yourselfs, blow what little money you have instead of saving and investing. I am single have a awesome job in health care and OWN a condo in Surrey that is not eating up my paycheques. I have no debt except my mortgage because I thing ahead, don’t you reaserch a career before you enter university? The people in this town never want to look at themselfs first they want to point the finger and blame others for their lifes problems, as a minority born, raised and educated in BC, I am glad I didn’t move downtown and end up like all of you. Yes Surrey sucks but I am making good money and can walk to work in 5 min. form a condo I OWN.”
‘vince’, commenting at soloinvancouver 23 Mar 2012 5:31pm

Debt and Compromise.
You can do it!
– vreaa

Billionaire Kwok Brothers, Developers In Coal Harbour/Richmond/UBC, Arrested In HK Corruption Investigation – “The impression is that government policies tend to favour the rich tycoons, particularly rich property developers”; “The power of the property sector is too strong, but the business-government connection is the same around the world.”

A pair of billionaire brothers in Hong Kong who have changed the skyline of Metro Vancouver with their mega-property projects have been arrested on suspicion of corruption.
Hong Kong’s Independent Commission Against Corruption (ICAC) arrested the joint-chairmen of Sun Hung Kai Properties, brothers Raymond and Thomas Kwok, on suspicion of corruption, the company said yesterday.
The Kwoks own $18.3 billion, the second-biggest family fortune in Hong Kong after Asia’s richest man, Li Ka-shing, founder of rival developer Cheung Kong (Holdings), according to Forbes magazine.

The ICAC announced on its website that the people arrested, whom it did not identify, were “alleged to have committed offences under the Prevention of Bribery Ordinance and misconduct in public office.”

In Vancouver, the Kwok brothers, through their Canadian subsidiary, Aspac Developments Ltd., are best known for transforming Coal Harbour into a prestigious waterfront neighbourhood, with the Harbour Green luxury condo towers.
Waterfront Place, Aspac’s first Coal Harbour development, was completed in September 2003. Each of the five towers was named after a famous European city: Avila, Bauhinia, Cascina, Denia and Escala.

In Richmond, the Kwoks are involved in the new urban low-rise waterfront community called River Green, which is being developed on the banks of the Fraser River near the Olympic Oval and the Vancouver International Airport.

At UBC, the tycoon brothers are behind the 17-storey highrise called The Wesbrook on the edge of Pacific Spirit Regional Park.

The arrests of the Kwok brothers triggered turmoil in Asian markets overnight, according to media reports in Hong Kong.

The family’s history is also filled with drama and scandal. The eldest brother, Walter Kwok, was kidnapped in 1997 by a man nicknamed “Big Spender” and held for a week until he was ransomed, and a feud between Walter and his two brothers in 2008 dominated Hong Kong newspapers for weeks.

The Kwok family is known to be devoutly Christian. In 2009, they funded the construction of a 450-foot Noah’s Ark, which includes a rooftop luxury hotel and nearly 70 pairs of fiberglass animals, for an undisclosed amount on a small island near Hong Kong. In the 1990s, Thomas Kwok, the middle brother, successfully pushed to establish a church in the pyramid atrium on the 75th floor of Central Plaza, one of its three tallest buildings.

– ‘Billionaire brothers who changed Vancouver’s skyline with luxury towers arrested in Hong Kong’, The Province, 30 Mar 2012

More than $5 billion was wiped off the market value of Sun Hung Kai Properties on Friday, after the billionaire owners of Asia’s largest real estate developer, who have also been involved with a number of Vancouver projects, were arrested on suspicion of corruption.

The arrests on Thursday come just days after Hong Kong elected Beijing-loyalist Leung Chun-ying as its next leader, pledging land for cheaper public housing, and as soaring property prices, the most expensive in the world, have stirred public discontent. Home prices almost doubled in the five years to end-2011, according to real estate broker Knight Frank.

“This is not good for the image of Hong Kong, which used to have a high reputation for integrity,” said Joseph Wong, a former senior government official and colleague of Hui. “The impression is that government policies tend to favour the rich tycoons, particularly rich property developers. These sort of cases will only add to the suspicions.”

“This is justice. They’re among the biggest, richest men in Hong Kong. The power of the property sector is too strong, but the business-government connection is the same around the world,” Terry So, an elderly chauffeur, told Reuters near the Sun Hung Kai Centre.

The unfolding scandal has gripped Hong Kong, the world’s most densely populated city which was returned to Chinese rule by the British in 1997.
“It’s a sign they’re trying to shift the power away from the tycoons,” said Alaric Lau, a 45-year-old independent investor in equities and fixed income, who was walking near Hui’s residence.
“These are three very prominent people in Hong Kong. The arrests are a sign of how they want to do things going forward … there’s no more favoritism that extends beyond the law … it’s a sign that the Chinese government is changing.”

The potential conflict of interest in a senior government official living – rent-free, according to media reports – in an upscale residence owned by an influential property family has not escaped public and media attention.
“We always assumed there was something between property and government. Maybe there’ll be more scandals. I think it’s a starting point in changing the relationship between government and developers,” said Joe Lin, a young marketing professional, during a smoking break near the Sun Hung Kai offices.

A former company employee who didn’t want to be named, said he was “very surprised and very sad” at the arrests. “They are men of integrity. Thomas would always repeat the company’s mission – Building Homes with Heart – during meetings and ask staff to treat clients with a true heart,” he said.

A loan banker in Hong Kong, who asked not to be named as his bank is a lender to Sun Hung Kai, said there was unlikely to be any significant impact on the company’s business.
“No one’s going to start cutting their credit lines to the company. Sun Hung Kai isn’t going bust because of this. It’s not a (mainland Chinese) mid-cap, but a Hong Kong blue-chip with hard assets and very low gearing.

– ‘Billionaire Kwok brothers arrested in Hong Kong, Sun Hung Kai Properties value plunges’, Vancouver Sun, 30 Mar 2012

We don’t expect any direct Vancouver effects from this, but it could possibly have a subtle effect on local RE sentiment. It adds to the cumulative negative info about the market that appears to be seeping in.
– vreaa

Federal Budget – No Changes To Mortgage Lending

“In fact in the entire budget, for which at least one medium forest died, the words “mortgage debt” do not appear. No cautions about overborrowing or the dangerous amount of collective net worth now stuffed into a single asset.
So much for Mark Carney. His continuous warnings about overheated housing in Vancouver, condo madness in Toronto or the inevitable impact of higher interest rates.”

– Garth Turner at 29 Mar 2012

“I had hoped this budget was really going to have some significance, but its totally anti-climatic. Canada is being crippled economically with the biggest ponzi scheme this country has ever seen.”
– ‘Vancouver Mt Pleasant renter’ at 29 Mar 2012 6:08pm

It’s what he didn’t say that is noteworthy.
The dog that didn’t bark.
The Finance Minister tippy-toed around the housing bubble, knowing that if he woke the bear, so much else in his budget would become moot. The bear will wake, regardless.
– vreaa

Mortgage Broker – “The government has done plenty to put the brakes on the Vancouver market. It is quite difficult to qualify people for mortgages even for the amount of house they need.”

“The article makes reference to our situation paralleling the US situation, and that is also utter nonsense in so many ways that I wouldn’t even start to get into them all. We do not offer loans at 100%+ LTV, we do not offer teaser loans to subprime clients and qualify them on the teaser rates, and we do not offer NINJNA (no income, no job, no assets) mortgages. As it is, in the Vancouver market, it is quite difficult to qualify people for mortgages even for the amount of house they need. The government has done plenty to put the brakes on the Vancouver market as it is. The harder the government makes it to lend money, the more that the market tilts in favor of the wealthy and the more difficult it will be for average and lower income earners to get ahead. That is a much greater thing to fear for the future.
I have said this many times, but the lending that really needs more regulation is the credit card and unsecured lending industries. What regulation have they been scrutinized under other than a regulation that requires them to disclose how long it takes to pay off a credit card bill with minimum payments? It is that ability to spend money so easily at such high interest rates that is really hurting people. However, the housing market is the one that gets constantly attacked. “Pay no attention to that man behind the curtain.”
I live and work in the highest priced market in Canada, and this is where it is hardest for people to buy. In most of Canada, housing is SO much more affordable than here. Most of the country has nothing at all to worry about.”

– Jeff Evans, Richmond mortgage broker, posting as ‘Jeff’ at 28 Mar 2012 9:01pm

“I have been enjoying all the radio, TV and print ads from the major banks telling everyone about 2.99% for 4 years as if they are offering you something special. I do have that available with other lenders as well, but I have something even better… 2.89% for 4 years! That is better than the banks are offering!
Contact me today and we can get you locked in for this special offer.”

– Jeff Evans at his site, 20 Mar 2012

What do you call a mortgage that starts at a 2.89% rate and then, after 4 short years, resets to a rate that is perhaps substantially more than that?
“Teaser”, perhaps?
– vreaa

Whistler RE Bust Continues – “A unit originally sold in the Four Seasons Whistler for about $1.1 million was recently resold for only $520,000. … It’s not anything wrong with Whistler or that Whistler is worth less”

Those who own a condo unit in a Whistler hotel are sitting on great potential, but at the moment the units are not showing great value.
Real estate consultant Denise Brown with Re/Max Sea to Sky Real Estate reported that a unit originally sold in the Four Seasons Whistler for about $1.1 million was recently resold for only $520,000.

“We’ve seen the prices come down significantly,” she said.
According to Brown, this segment of the real estate business is at the bottom of the cycle so prices are good right now. She said the people who are happiest in the condo hotel market are those who are in for the long-term and have made a lifestyle choice in purchasing a condo unit in a hotel.
“It is only those people who are looking for a lifestyle that own their own property in a complex that they like and believe in and want to use with their family,” she said.

Pat Kelly, from the Whistler Real Estate Company, said when condo hotel units first became available in Whistler expectations were high.
“People were buying on vision,” said Kelly. “Revenue has not met expectations in the last few years.”
According to Kelly, the lower than expected revenues produced through hotel condo units has combined with exchange rates, high strata fees, high property taxes and fixed overhead costs to drive prices down.
“The market is now valuing these things properly,” Kelly said. …
“Some of our friends to the south have had to do some pretty significant financial rationalization, which has caused them to want to sell things,” he said.
According to Brown, the people who were relying on the hotel condo units to produce high returns beyond covering all the costs associated with owning this type of property are getting out of their investments.

“It’s not anything wrong with Whistler or that Whistler is worth less,” said Kelly. “It is just that people are prepared to spend less.”

– from ‘Hotel condominium units hit hard by current economy’, John French, Pique, 1 Mar 2012


“Great potential, but at the moment the units are not showing great value.”
“It’s not anything wrong with Whistler or that Whistler is worth less.”
(This from the same guys, we’ll bet, who used to say stuff like “real estate is worth whatever somebody is prepared to pay for it”.)
– vreaa

“I had an informal conversation with a Burnaby accountant working as a debt manager. He said most of his clients are so ridiculously over-invested in GVRD real estate that he fully expects a hard landing for Vancouver.”

“I had an informal conversation with a Burnaby accountant who has been very busy working as a debt manager. He said most of his clients are so ridiculously over-invested in GVRD real estate – significantly negative cash flow returns, average mortgage debt per client of $600K, etc – that he fully expects a hard landing for Vancouver.”
Airedales at VREAA 27 Mar 2012 2:10pm

CBC Features Surrey Mall Glass Condo Faux ‘Reality’ Show Promotion – “Sure it’s an obvious marketing ploy to get media attention, but, hey, cheap stunts make the news all the time, why not now?”

“Three actors are living inside a glass structure at the Surrey Central City Mall, with just about all their movements broadcast on the internet and watched by passers-by. They are acting in a 450-hour live, online video “drama,” 10 hours per day, over the next six weeks.
But it’s not a reality show, or pure drama. It’s all part of a unique commercial effort to sell real estate.”, 26 Mar 2012

On the CBC video clip:

Announcer1: “The show isn’t really about reality, it’s about selling real estate.”

Announcer2: “The action takes place in a very small condo, with sliding doors and walls.”

Morrison: “… so that people could see the floor plan in action.”

Announcer2: “Sure it’s an obvious marketing ploy to get the media’s attention, but, hey, cheap stunts make the news all the time, why not now?”

Well, we lost the Playhouse a few weeks back…
Interesting on a few levels:
1. RE promos saturate local spaces/psyches.
2. ‘Reality’ TV and ‘Real’ Estate: how ‘Real’ is it?
3. When you buy RE in Vancouver, are you stepping into a role?
4. CBC being an instrument of the hype while commenting on that at the same time (“We know this is wrong but we just can’t help ourselves”).
5. Other?
– vreaa

Spot The Speculator #77 – “She’s kept the Cambie property and hopes to turn it into rental income in future.”

“Phoenix Lam returned home in 2005 after years of basement suites and roommates.
“I realized I wasn’t ever going to save enough for a down payment,” the 28-year-old said of spending more than half her monthly income on rent and expenses.
Instead, she paid minimal rent while at home. Four years later she had saved enough for a mortgage on a 566-square-foot apartment in Cambie Village.
“I wouldn’t be owning if I didn’t do that.”
While Lam now lives elsewhere, she’s kept the Cambie property and hopes to turn it into rental income in future.”

‘Hopeful homeowners staying in the nest’, Stephanie Ip,, 22 Mar 2012

Swedish Firm Aims to Buy 10,000 Canadian Apartments in Next 3-5 Years

Roger Akelius

“Akelius Real Estate Management Ltd., Sweden’s largest private own multi-residential company, has set its sights on the Canadian apartment market.
Over the past few months the company has purchased five properties (209 apartments) in Toronto and intends to buy another 800 units this year. Canada’s largest city is its primary focus currently but Akelius does intend to buy in other major centres in the future.
Akelius, which has a property portfolio of 35,000 apartments in Sweden and Germany, views Canada as a place with characteristics that are very similar to its home market: relatively safe and stable and with a growing population due to a steady influx of immigrants.
“We researched the U.S. too and the [finding] was Canada has the good things of the U.S. but not the bad things,” said Jordan Milewicz, the President of Akelius.
Canada’s population growth, which Akelius figures will be powered by immigration of about 240,000 people per year, looks good when compared to forecasts for a declining population in Germany and recession or worse in much of the rest of Europe. “Germany is the only market I would say where you are able to purchase anything without any risk or with a small amount of risk.”
Beyond Toronto, Akelius will need to look at other large cities to reach its stated goal of 10,000 units within three to five years. Those include Montreal, Calgary, Edmonton, Vancouver and perhaps Halifax.

– from ‘Swedish Firm Aims to Buy 10,000 Apartments in Next 3-5 Years’,, 26 Mar 2012

Forget the helicopters, the Swedes are coming!
We said we look for bullish stories as ardently as bearish, and Zerodown sent this along saying: “Here’s a bullish anecdote!”.
It is intriguing that the Canadian numbers look better to these guys (Vancouver included!?) when compared with the US.
The article ends: “The Wikipedia entry for Roger Akelius describes him as an entrepreneur and author of technical books on computer programming who is currently in his mid-Sixties. In 2010, it was reported that Akelius, who now lives in the Bahamas, would donate 100 million Kroner (about $15 million) over 25 years to a children’s charity in the wake of the earthquake in Haiti.”
Perhaps exactly what the Vancouver rental market needs… subsidies from foreign philanthropists!
– vreaa

Spot The Speculator #76 – “The 29-year-old started saving aggressively in her mid-teens and by 20, was able to purchase her first piece of property. From then through 26, she bought a new property each year while still living at home.”

“My parents would much rather me stay at home and save than to not have anything to show for the rent I was paying,” said Angela Calla, host of CKNW’s The Mortgage Show.
The 29-year-old started saving aggressively in her mid-teens and by 20, was able to purchase her first piece of property. From then through 26, she bought a new property each year while still living at home.
“It all starts with a plan and with educating yourself,” Calla said, adding her parents didn’t help her financially but allowed her to live rent-free.

‘Hopeful homeowners staying in the nest’, Stephanie Ip,, 22 Mar 2012

Infographic Argues For A Soft Landing – “Just because it is in the form of a Tintin book, doesn’t make it true.”

– this infographic from, a ‘mortgage blog’, 27 Mar 2012.
The link was kindly forwarded to us by frequent contributor ‘Zerodown’, who adds:
“I admit to being impressed with the thoroughness of this info graphic. However, just because it is in the form of a Tintin book, doesn’t make it true. An annotated version will be required.”

We think this infographic overstates the strength of Canadian borrowers: 5% has not been the minimum downpayment; 32% of income has not determined the ‘maximum affordability’; 153% debt-to-disposable-income ratio is a very significant level; “Long term low interest rates” do not “shield the market from a bubble burst”.
We personally can’t see a soft-landing (a coolly deflating balloon?) playing out.
Who do we expect to keep buying Vancouver RE at these extremely lofty price levels once the promise of future abnormally large price gains disappears? Because, that is what would be required for a ‘soft landing’; a steady stream of buyers prepared to take out ginormous loans to buy RE that is no longer appreciating, or is very likely dropping, in real terms.
Who do those calling for a ‘soft landing’ propose to be doing that buying?
– vreaa

“My wife and I both work in healthcare in Vancouver. We are currently experiencing a flood of applications from our local talent, the USA, and around the world. I know it doesn’t fit with the “message” on this blog, but this is the true reality.”

“My wife and I both work in healthcare, both here in Vancouver, PHSA and VCH. We are currently experiencing a flood of applications from our local talent, the USA (especially), and around the world. It is a very competitive hiring environment. Local nursing schools are producing far too many graduates and few have employment offers upon graduation. My wife tells me that many of our medical school graduates are also having trouble. But please, don’t take my word for it, simply look at the career websites at each of our health regions and you will see very few postings. And though we only have 4 degrees between us, we know of what we speak. My wife was recently part of a team recruiting for a new pediatrician at the Children’s, MANY applicants, hired a physician from Johns Hopkins. Hey, I know it doesn’t fit with the “message” on this blog, but this is the true reality.”
allen at VREAA 27 Mar 2012 9:27am, responding to a post from ‘Vancouver in Rearview’ claiming that “Recruitment to Vancouver for skilled health professionals is nearly impossible.” [VREAA 27 Mar 2012].

Interesting, as we have two different health care ‘insiders’ describing very different recruitment conditions. Perhaps they are looking at different subgroups within the field?

With regard to allen’s comment on “message”: At VREAA we welcome any form of personal anecdote pertaining to Vancouver RE, regardless of what ‘message’ it may seem to project.
Even though we are personally very bearish regarding Vancouver RE, we hold our opinion because of the available data, including accumulated anecdotes.
So, we invite you to submit any personal stories that shed light on what is happening in the market, regardless of your opinion regarding future market direction. In fact, we come across so few ‘bullish’ stories, we’d particularly like to hear any of those.
– vreaa

“My in-laws recently bought into a townhouse development that completes in April. They are both accountants. Their gross household income is around 100k. I just found out the details of the purchase…”

“My in-laws recently bought into a townhouse development that completes in April. Their gross household income is around 100k. I just found out the details of the purchase:
Price of unit: 540,000
Downpayment: 108,000 (20% to avoid having to pay CMHC insurance)
Mortgage amount: $432,000
Now for the sub-prime part:
Downpayment came from 3 sources:
1) 25,000 came from parents’ HELOC.
2) 80,000 came from a line of credit from a major Canadian bank (WHO THE F*** GAVE THEM THIS MONEY AND WHY???)
3) 3,000 came from their own savings.
So, while boasting that their mortgage payments are *only* 1800 a month, they also intend to pay down their line of credit at a rate of $1,000 a month for the next 6.66 years, as well as make interest only payments on their parents’ HELOC. Oh, and they also intend to move out 5 years later in order to buy a house so they can have kids while she goes on maternity leave. So, in order to minimise the interest paid on the purchase, they aim to throw every spare penny into paying off the mortgage sooner.
They are both accountants.”

TPFKAA at 25 Mar 2012 3:39pm

UPDATE: TPFKAA notifies us of an error in the story and sent this correction via e-mail and a comment in the thread below:

RE: this story.
Damn it. I knew the story sounded too sensational. So it turns out I was misinformed by a family member. In the interests of journalistic integrity, I have to issue a correction or I could not sleep at night.
In fact, the couple DID have 30,000 stuffed away in RRSPs. Their downpayment was actually 140,000. All other details are the same. So, they put in 30,000 of their own money, 80,000 from a LOC and 25,000 from parents`HELOC.
In some ways this makes the situation worse. They now have to pay back each year the taxes on the RRSP withdrawal, as they will not be repaying them in the next ten years. So on the amount they are supposed to pay back in, they will have to pay taxes instead.
Moreover, they have their actual savings on the line in the event of even a minor correction.
I guess this is technically not a sub-prime mortgage, then. More like a sub-optimal financial decision.”


“Recruitment to Vancouver for skilled health professionals is nearly impossible. I’m leaving, too.”

“I work for/with a large health organization in the lower mainland. Here is the bottom line:
Recruitment to Vancouver for skilled health professionals is nearly impossible. For very skilled, technical, health professions, out-of-city recruitment just doesn’t happen. If they don’t already live here, they aren’t coming. They can make more money ($5-$7/hour more, depending on the profession) in Alberta, with housing costs way lower to live in Edmonton or Calgary. For people with families and/or student loans, Vancouver is a non-starter. Our pay here is relatively low compared to other jurisdictions, and our cost of living is enormous. Plus, our employment scene really isn’t that great here for spouses – yes, there are jobs, but the professional ranks here are pretty thin. We don’t build stuff in Vancouver – in fact, I don’t know *what* it is we actually do here!
Yes, Vancouver is a pretty city with water and trees and mountains, but guess what – you can’t eat the scenery and more young families (the ones you want to recruit for the long haul) do the math and say ‘better value elsewhere’.
I’m leaving too – just got back from a weekend in Seattle and my wife and I said “and why do we stay in Vancouver?” We have five university degrees (three Bachelors, two Masters, one PhD in progress – in health sciences and engineering, in case you were wondering) and we can’t wait to pull the pin to move to a place where we can have a house of our own and be around people that do more than just talk about real estate.
As an aside, the bigger problem with real estate in this city is that it has turned the culture into one where everyone wants to be rich, without actually doing anything. Go to a city where people care about actually doing real work, creating value, building things….wow – what a difference in energy! More than anything, that is what Vancouver lacks, and unless that attitude changes, Vancouver will be condemned to also-ran economic status and will continue its status as an economic and cultural backwater.”

‘Vancouver in the Rearview’ at VREAA 25 Mar 2012 12:01pm

Marine Gateway – Did 415 Pre-Sales Sell To Fewer Than 150 People?

‘Marine Gateway’ condo pre-sales were previously discussed here, in a post featuring Bob Rennie’s interview on CKNW Radio [16 Mar 2012]. The project was later widely reported to have sold out within 4 hours, and the event touted as “the most successful condo launch since Woodward’s in 2006”.
There has since been a report by ‘village_whisperer’ [whispersfromtheedgeoftherainforest 22 Mar 2012] that the 415 pre-sale units sold to somewhere between 110 and 150 people. If this indeed the case, this is another important landmark event in our speculative mania, and we record the link to ‘whisperer’s discussion here, for the chronological record.

“I graduated from high school in this city in 1980 and out of the 300 members of my grad class no more than 25 of them now own a house in the neighborhood we grew up in. We are not all stupid and lazy.”

“I graduated from high school in this city in 1980 and out of the 300 or so members of my grad class I would say that no more than 20 or 25 of them now own a house in the neighborhood we grew up in.
We are not all stupid and lazy.
The laughable irony is that at the 30th high school reunion that almost all of the people present came from other areas of the Lower Mainland for the reunion.
One guy I know from my class who is a lawyer mentioned to me one day that he could never afford the house he grew up in, and his father now retired was a blue collar tradesman.
For him to ever get near the old neighborhood, well, someone’s gotta die first.
In fact that is exactly how some of my classmates are now moving back to the area they grew up in, but none of them will admit to that.
It’s just a big coincidence that they move back a few months after someone kicks off.
The guts of the middle class in this city have been ripped right out of it.
I know at least 18 people who have left Vancouver simply because they realized at some point that they were NEVER going to own a house here, and spending the rest of their lives in a over mortgaged rabbit hutch was not acceptable.
Many of them are now in Alberta.
I have read that 55,000 people under the age of 45 have left Vancouver.
Vancouver is the most over rated city on earth.
Like a Hollywood movie set where the street scene looks real, if you step behind the facade of the Vancouver illusion then things here are really quite ugly.
There are a lot of serious social problems in this city that no one wants to admit exist because the Vancouver illusion must be maintained at all costs.”

John H at 23 Mar 2012 11:05pm

“I have a have a good friend whose dad is a developer in China, and he knows some developers here. Here are the possible explanations that he offered for why the influx of foreign cash seems to have dried up.”

“I have a have a good friend who is from mainland China. He rents in Burnaby, and it was pretty easy for me to convince him that right now is not a good time to buy. He is frugal, even though his family could easily afford these outrageous prices for cash. He came here as a business immigrant.
His dad is a developer in China, and he knows some developers here. For example, he recently told me some of his fathers’ friends will be starting a new condo tower build in Richmond.
Here’s are the possible explanation that he offered for why the influx of foreign cash seems to have dried up:
1) In 2010, the law came into effect in China, limiting the purchase properties to two more. I.e. if you have zero, you can buy two more. If you have 20, you can buy two more. Now, those who have the money have already bought 2 more properties, so they can’t buy any more. People who need to sell – e.g. to buy a house in Vancouver – can’t find a buyer. As a result, he says that the prices have taken a tumble in some areas of Beijing from up to $3000 per square meter down to $2000.
2) Chinese people prefer US over Canada – Seattle, San Francisco, LA. According to him, US is the #1 choice. Furthermore, business immigration quotas have been reduced in Canada. He says that it’s now easier (and cheaper) to go the states if you have money. I don’t think I need to spell out the obvious differences in the real estate markets. In his opinion, it’s unlikely that the Chinese would speculate in an area where they can’t live. I.e. he doesn’t think that they would invest in real estate if they can’t get a visa to live here.”

“In addition, let me tell you about a young couple I pried from the hands of the condogeddon. A friend of mine, a young teacher and her boyfriend (engaged) just sold the apartment they shared with his brother. I explained to her the obvious reasons why real estate is overpriced – price to rent, interest rates, speculation, etc. It took no more than 15 minutes. I then provided her the links to this blog, and a couple of other resources to research on her own. They walked away with a profit, and are renting a better place for less than what the mortgage and condo fees were – without the need to share it with his “quirky” brother.”

“Feel free to publish this on your blog.
Furthermore, do you have any questions you’d like me to ask my Chinese friend?”

– this from ‘Some Guy’, via e-mail, 24 Mar 2012

Thank you, Some Guy.
Do any readers have any questions they’d like him to extend to his friend?

CMHC Cap – “If they do in fact operate within their $600B cap, check out how drastically the growth in their insurance in force would have to slow. That’s a hard stop if ever I’ve seen one.”

– chart via e-mail from Ben Rabidoux, of ‘The Economic Analyst‘, 25 Mar 2012, who adds:
“Attached is a chart of CMHC cap on insurance in force as outlined in their latest Corporate Plan. If they do in fact operate within their $600B cap, check out how drastically the growth in their insurance in force would have to slow… only 20% of 2007-2011 levels for the next 5 years, or a slowing to less than 2% annual growth. That’s a hard stop if ever I’ve seen one.”
[Thanks Ben. – vreaa]

What’s In A Name? – “The East Village just kind of fit us. We’re in the east, and it’s sort of a village-like area.”

“For Vancouverites who have dreamt of living in the Big Apple’s East Village, Hastings may now be the next best thing. The commercial district formerly known as Hastings-Sunrise is adopting the same moniker as the historically hip New York neighbourhood.
The trendy new name is just one aspect of an evolving rebranding campaign spearheaded by the Hastings North business improvement association .” …
“Working with brand consultants Signals Design Group* over the last eight months, the HNBIA began its rebranding process by conducting interviews and a survey with its membership—400 business owners and 200 commercial property owners—and residents in the area. The final East Village name was selected from a shortlist of 10 names.
“The East Village just kind of fit us.” says Patricia Barnes, Executive Director of the HNBIA. “We’re in the east, and it’s sort of a village-like area. We’re a neighbourhood commercial district, we have a lot of services and stores and staples that respond to our neighbourhood’s needs. We have a very loyal customer base in our neighbourhood and very friendly, very warm personal service.”

– from ‘HASTINGS-SUNRISE TO ADOPT THE NAME “THE EAST VILLAGE”, by Alexandra Samur, openfile, 19 Mar 2012 [hat-tip Aldus Huxtable]

VANHATTAN redux. -ed.

“Ryan and Laura Cain wanted three children. Despite having great jobs, the surgeon and physiotherapist say they couldn’t afford to stay in Vancouver.”

Announcer1: “The high cost of real estate in this province isn’t just an annoyance anymore, it’s life altering, quite literally” …
Announcer2: “Ryan and Laura Cain always knew that they wanted three children, but the decision to raise a family came with a compromise. Despite having great jobs, the surgeon and physiotherapist say they couldn’t afford to stay in Vancouver.”

Laura Cain: “We’re lucky enough that my husband’s work allowed us to actually move out of Vancouver because the housing was so expensive here and now in Cranbrook and there housing prices (are) much more affordable.”

Dr Ryan Cain: “You know, as a young surgeon starting out here the cost of living is something to consider. In the Kootenays its a little bit different and I’d certainly say you get a lot more for your dollar.”

Dr Paul Kershaw, UBC Early Learning Partnership : “You may be making six figures and still be having a mortgage of $600K for 700sqft and then you’re thinking about how do I have a couple of kids on my balcony?”

Announcer: “According to StatsCan, BC has the lowest fertility rate in the country, with more women giving birth over forty than any other province. In Canada they are also having fewer children than in other major Canadian cities.”

Kershaw: “Incomes have stalled for young families… they’ve actually dipped in BC.. and people have to pay for housing prices in BC that has gone up 149%

– from Global TV News, 21 Mar 2012

[hat-tip Liggsie, Greenhorn, others]

The speculative mania in housing is applying pressure on sensible people to leave Vancouver; this is bad for our city.
– vreaa


“CMHC has signalled it will dramatically curtail its growth in the mortgage market”

“Canada Mortgage and Housing Corp. has signalled it will dramatically curtail its growth in the mortgage market in the coming years in an effort to cool Canada’s sizzling housing sector.
Documents released by the Crown corporation this week show CMHC expects to increase mortgage insurance over the next few years at only a fraction of the pace seen recently.”

– from ‘Bank regulator proposes heightened scrutiny of mortgage market’, G&M, 19 Mar 2012 [hat-tip Derp]

This ‘signal’ has been widely discussed across various blog sites.
Headlined here for the chronological record.
This could be enough to crash the Vancouver market.
A soft landing (a ‘cooling’) will not occur, as buyers will not step in at stratospheric high price levels without the expectation of abnormally large price gains going forward.
– vreaa

Global TV Bearish News Piece – “What you pay today may be considerably more than what your unit’s worth when you finally take possession.”

Global TV News, 23 Mar 2012

Excerpts –

Announcer – “Canadians are carrying more personal debt than ever before, and cheap mortgages are just adding to the problem”.
[… actuallyhave been adding, for the last 9 years.  – ed.]

Announcer “The financial markets are already betting that the BOC will begin raising it’s trend setting rate by years end. It’s all adding up to a financial landscape that is about to shift.”

Announcer “For those thinking of buying now, the warnings are out: What you pay today may be considerably more than what your unit’s worth when you finally take possession”.
[Remarkable. That statement, taken to heart, should freeze any prospective buyer. -ed.]

Michael Levy, Financial Analyst – “I think Vancouver and Toronto will probably lead on the way down, and it wouldn’t surprise me to see a 10-15% in this market.” … “The condo market is overbuilt in Vancouver.. and the financial institutions are saying maybe we better take a better look at the developers who are putting these schemes in front of us, because this market is heavy right now.”

Announcer – “…BC and Alberta are the two provinces with the highest average household debt. And in BC much of that debt is secured by equity in our homes. But what happens when property values drop and mortgage rates go up? which is now widely predicted to happen.”

Scott Hannah, Credit Counselling Society Of BC – “What a lot of consumers aren’t aware of is how quickly their circumstances can go from being able to manage their affairs effectively to being in extreme financial difficulty, in a short period of time..”
[Amen. -ed.]

Announcer – “But Canadian banks have only themselves to blame for ramping up household debt that in some cases may never get repaid. Every one of them offers HELOCs, encouraging you to use your home as collateral for yet another line of credit.”

This is the kind of news piece that can herald the start of the implosion.
10-15%-off will be nothing but a good start.
You can imagine the negative synergies that will be at play once the wheels come off: Buyers pause, construction freezes, economy freezes, buyers even more moribund, offshore buyers become sellers, owners come to market en-masse, etc. etc.
Virtuous cycle turns vicious.
50-66%-off, here we come.
– vreaa

“Some are saying that there is no legitimacy to claims that working class or low income people should be able to live in the City of Vancouver.”

“Some are saying that there is no legitimacy to claims that working class or low income people should be able to live in the City of Vancouver–and that the suburbs do these groups just fine.”

“But what’s being forgotten here is that, until recently, working class and low-income people have long lived in the City of Vancouver. I grew up in the City of Vancouver in the 80s and 90s and my dad was a working class non-union labourer who really made a pittance wage. My parents rented. They could afford to rent in Vancouver, not in social housing, in private market rental housing. We had half of a house and a big yard in the City of Vancouver on a working class single wage.”

“My mum’s family was also working class–also rented a big house in Vancouver–that house would probably go for $2 million in today’s market.”

“We’ve been forced out to Surrey because of high rents in Vancouver. The move was a slow progression, for me. My first place when I was 19 and living away from my parents for the first time was a rental in East Vancouver. I shared it with two other roommates. My share of the rent was $350 a month. I had a minimum wage full time job and paying rent in Vancouver was easy. That was in the late 1990s–not so long ago. Things don’t work out with roommates so you move around a lot when you’re young. But with each move I made, the rental market became progressively more difficult. It’s not just a problem with high rents. It’s also simply a lack of vacancies–or the only thing available is total dumps (I had a nice place for $350 a month when I started out)–or they don’t allow you to take your cat. So that forced me out of the city I grew up in.”

“I left Vancouver at the very end of 2001 because already by then the rental market was getting difficult in Vancouver. I went to New Westminster–which is a great city. I believe New Westminster is the densest city in Canada. It is very urban. Great place to live if you are an SFU student–skytrain to Production Way and then a bus up the mountain. So I lived in New West and I went to SFU. Incidentally, my ancestors built New West–I’m just learning about my genealogy now but it’s fascinating. I can trace my ancestry back in New West back to 1865.”

“But then I was renovicted out of New West. Transglobe Property Management went on a buying spree in New West in 2006 and bought up lots of apartments. My apartment building had about 70 units–all 70 households evicted–had to be out by Dec. 31–New Years Eve!!! They renovated and jacked up rents after we were gone. Many longterm tenants in that building, including war veterans and one woman who lived there 40 years. So then I ended up in Surrey–along with a lot of the other people who were evicted from that building.”

“Whalley is one of the last areas of affordable rental housing near skytrain (crucial for people renovicted out of Vancouver/New West but still working in Vancouver) left in the Lower Mainland. But Mayor Dianne Watts is putting up high rise condos everywhere. She’s built a new library. City hall is moving here. It’s not King George Highway anymore, it’s King George Boulevard. It’s not even Whalley anymore, it’s Downtown Surrey. This is to become Metro Vancouver’s second tier downtown core, after Downtown Vancouver. But this is also about gentrification. I’m afraid these dumpy rentals in Whalley are going to be demolished for condos. Then where will I go? Langley? Abbotsford? No skytrain there to connect me with work and social connections back in Vancouver. Time to leave the province soon. I’d rather live in Calgary than Abbotsford.”

“Working class and low income people do have a legitimate claim to the City of Vancouver because we (and our ancestors) built the City. It’s where we grew up. We have memories there. We have friends there. We go to school there. We work there. We access services there and amenities. If you’re gay–the City of Vancouver is so important for community and for just walking down the street holding your partners’ hand. Surrey is just a dump. It’s really hard to find community here and services. Everything is worse here. Even the hospitals and the medical clinics and grocery stores are worse in Surrey. And we have to pay 3 zone $5 bus fares to go back to Vancouver to visit old friends or for jobs. Try that when you’re making minimum wage $10 an hour. Your first hour of work is just to pay for your transit costs (and a lot of jobs only give 4 hour shifts–first hour pays transit, second hour pays lunch, you only net benefit from 2 hours–$20 per shift–less CPP, EI contributions–hardly worth it to work–probably make more money staying in Surrey collecting cans than commuting to Vancouver for min. wage).”

“Having said all that, I do think there is a bit of truth in the statement that the suburbs are becoming more urban and Vancouver is becoming more suburban. I mean, there’s actually a costco in Downtown Vancouver (a mark of suburbia)–but I can’t find a costco in Surrey. I used to go to UBC as well, since I’ve been living in Surrey (en epic commute by transit!). It’s weird that we have a rapid transit skytrain system in Surrey that connects us to Burnaby, SFU area, Lougheed, New West, but as soon as you come into the City of Vancouver you have to get off the train and board a bus the rest of the way to UBC. The west side of Vancouver (where I grew up) does feel like some strange enclavish suburb where hardly anybody lives. Surrey, New West, Burnaby, Lougheed area–all way more urban than vast portions of the City of Vancouver. And the feeling of community is coming here. You can see it right outside on King George Highway (I don’t call it boulevard because I don’t like gentrification)–the diversity of pedestrians walking up and down King George is more than the diversity you get in Vancouver, in terms of class and race. Way more working class feel in Surrey. Way more black people and people from all countries of the world in Surrey–compared to Vancouver which is mainly Chinese. The gays are coming this way too. Surrey has a gay pride parade now. There’s gay pizza shop/cabaret on King George.”

“So I’m actually starting to like Surrey now. I’m not sure I want to go back to Vancouver even if it did suddenly become affordable. I mentioned that I have memories in Vancouver–but it’s disturbing to go back there and see all the changes. The way Vancouver is now is not how it is in my memories. So I can remember more easily how it was, if I stay away. My community isn’t there either, increasingly. So I’m turning a page and I’m never going back to Vancouver no matter how affordable it becomes. But I do think working class people like myself still have a legitimate claim to Vancouver if we want to live there because it’s where we’re from.”

Joe_Blown_Away_By_High_Housing_Costs at VREAA, 23 Mar 2012 8:21am

Announcement Of Vancouver Comedy Club Reopening References Real Estate

“After a two-year absence, the Yuk Yuk’s chain of comedy clubs is coming back to Vancouver. …
Yuk Yuk’s founder Mark Breslin said a franchisee dispute forced the closure of the previous location in the Century Plaza Hotel on Burrard Street two years ago.
“We thought we’d be able to open up something a lot faster, but it’s not easy to find a good piece of Vancouver real estate that hasn’t been used yet,” he said. “We loved it [the new location] and we had to wait to negotiate it. The hotel was in transition. So we’re actually opening up about a year after we thought we would.”

‘Yuk Yuk’s comedy clubs returns to Vancouver’, Georgia Straight, 22 Mar 2012

Q: What do you call a comedian who can only afford to live a two hour commute from his Vancouver gig?
A: Successful!
– vreaa


“What has changed are expectations. They feel that the proximity to a really good Ethiopian restaurant should be the natural order of things.”

‘The Vancouver real estate market continues to soar.’

“When I moved to Vancouver 36 years ago, I blanched at the cost of housing. Buying a home inside the city was impossible.
It was marginally less so when my wife and I got married. But the houses we looked at came with big prices and small promise.
We had a family to raise. We moved to the suburbs.
We rented for eight years, raising our three kids in that time. It was only with the help of my in-laws that we could afford our first house, and then only after cashing in all our assets, including all our RRSPs. Then we borrowed big from the bank.
Ours was a typical middle-class story, and still is: help from the parents, an outward move, a mortgage.
And then as now, Vancouver’s real estate was unaffordable. Nothing in that regard has changed.”

“What has changed are expectations. There are those who feel that the lack of cheap housing in Vancouver is an abomination. They feel that the convenience of a short commute or the proximity to a really good Ethiopian restaurant should be the natural order of things.
That feeling is often expressed in tandem with a loathing for the suburbs, and for the cultural vacuum that, for them, the suburbs represent.
What has also changed is that these feelings have been politicized. They are now an Issue; witness the Mayor’s Task Force on Housing Affordability. And as an Issue, reasons that are ostensibly sociological in nature have been made to propel it.
Such as:
Affordable housing makes for healthier neighbourhoods. Affordable housing makes for more diversity. Affordable housing provides housing for middle-class families with children.
These reasons, it should be said, are also urban-centric.
That is, they continue to make the distinction between urban and suburban, as if the “real” city stops at the Vancouver border and the rest is overflow.”

“But that doesn’t apply any more, especially here. More than three-quarters of Metro Vancouver’s population growth is now taking place outside of Vancouver proper, and with that population growth has come more jobs and businesses than Vancouver has been able to produce lately.
It has also rejuvenated once-moribund suburban neighbourhoods. Even in my own neighbourhood in Delta, scores of young families have moved in, bought old-stock housing and updated it. Those young families have also brought with them more cosmopolitan tastes. The suburbs are filling up, and feeling less and less suburban with each passing year.
Conversely, in many respects, the city of Vancouver is feeling more and more like the suburbs. There’s been a steady conversion of industrial land into housing. The major growth in the downtown core has been in condominium construction. And the central political issue preoccupying Vancouverites is not jobs or taxes. It’s housing — the tension between densification and affordability. Vancouver has become its own bedroom community.”

“Vancouver, of course, will always be the centre of things in the Metro area. It has history and critical mass on its side.
And by its very nature, it is going to attract people who want to come here and live in the city.
But should that be a concern of government? Should there even be a task force? And can it have any effect on affordability?
I doubt it: without government subsidies, the market will propel any kind of property here into the stratosphere.”

“But task force member Michael Geller, who is both a developer and an adjunct professor with Simon Fraser University’s Centre for Sustainable Community Development, believes the task force could usher in a greater selection of housing types than what Vancouver has now.
“One of the more affordable forms of housing being built in Toronto, for example,” Geller said, “is stacked townhomes — a two-storey townhouse being built above another.”
Those Toronto townhouses, Geller said, start at $309,000. In Vancouver, Geller admits, they would be much more.
“There’s nothing that this task force can do to make Vancouver as inexpensive as Toronto or Edmonton. But I do believe it will mean changes in the processing of building permits, and in the wording of zoning bylaws that ultimately will lead to increased competition and more affordable housing choices.”
It would also mean densification.
Geller thinks there is an appetite for it; I’m not so sure.
University of B.C. professor Tsur Somerville, director of UBC’s Centre for Urban Economics and Real Estate, agreed with Geller that the task force could give rise to new forms of housing.
“But I haven’t seen anything,” Somerville said, “that won’t anger the neighbourhoods of the city that don’t want densification.”
As for affordability:
“The only thing that’s going to make housing in Vancouver cheaper,” he said, “is a collapse in housing prices.”
Hands up, you well-meaning social engineers, who want that.”

– this is the entire article from ‘McMartin: Affordable housing in Vancouver? Why bother?’, ‘Short commutes and easy access to an Ethiopian restaurant are not the natural order of things’, Peter McMartin, Vancouver Sun, 22 Mar 2012 [hat-tip space889]

This is yet another ‘straw-man’ opinion/column/argument.
To re-iterate: No credible critic or commentator that we are aware of is asking for anything for nothing.
People are pointing to the outrageous prices that are the product of a massive speculative mania in housing, and are saying that they aren’t prepared to overextend themselves for the ‘luxury’ of owning in this city.
They are not asking for free or cheap accommodation.
They are pointing to the dire social consequences of a housing bubble; to people leaving the city; to important professions avoiding it in the first place; to the social fabric being sorely tested by the misallocation of human resources that comes with a giant speculative mania.
It is not that ‘expectations’ have changed, it is that prices have ballooned disproportionately to any underlying fundamentals. Sommerville wasn’t making a serious prediction when he is quoted as saying that “a collapse in housing prices” would make housing in Vancouver cheaper, but this quip will turn out to be correct. What “social-engineers” may want is beside the point, what we’re going to get is a housing price implosion, regardless of policy.
By the way, we’d guess that the price:income housing ratios in Vancouver were very substantially lower for Peter McMartin 36 years ago, the ones he baulked at, than they are today. Exact numbers for 1976, anybody? We do know that the ratio has doubled in ten years, from 5.4 in 2001 to 11 in 2011 (source: BMO, 2011).
And the bit about “Ethiopian Restaurants” is an insult to all of those who have serious concerns about the Vancouver housing situation: It aims to make anybody with criticism of price levels appear elitist, and irrelevant, and silly; as if concern about housing prices is equivalent to wanting access to esoteric things like fancy exotic restaurants.
– vreaa

BMO, 2011


‘Sun columnist Pete McMartin gets a mud-pack at a spa. And loves it.’
Vancouver Sun, 5 Jan 2010, the third item that comes up when you google: “peter mcmartin” vancouver.

“My mistake was to not realize the intensity of their belief in the cult of real estate, and that any appeal to reason would be met with vitriol, as with any other cult.”

“Here’s another, less-discussed perspective on this RE madness: the sickening feeling of watching those you love commit slow financial suicide by buying yet more RE, right at the peak, and the fractures created when we try to warn them.

A week ago a family member called to say that they have just bought a house near us. Great, except that (1) they are buying the new place at the probable peak of the market, (2) they are keeping the old house “because (they) think it will be worth more later” (it’s only gone up about 8% total in the last 5 years, less than the rate of inflation), (3) they also (I think) “own” two rental places which have dropped about 10% in value in the last 3 years and a non-revenue property (which is just straight expense), and (4) they have young children. Good thing they have well-paid, secure government jobs.

For otherwise intelligent, financially savvy people to simply assume that real estate always goes up or at least not down much, nor for very long, (and they’re 40, so as far as they know, it does always go up) and not even cross-check their assumptions simply stuns me. I’ve been trying for the last 18 months to get them to reduce their risk, given that we’ve got to be close to the market peak and the chance of a significant move downward is probably far higher than that of even a 5-10% move upward. So, at risk of making them even madder at me, I sent them another massive email detailing all the reasons RE is extremely risky now. Of course, they desperately need real estate to continue upwards, so they wrote back a mean, rude personal attack email, cc’d to the entire wider family.

It’s so futile. In the end when they lose their shirts in the big collapse, they sure won’t thank me for the warning they ignored nor even acknowledge that they got a warning! Sigh. At least since they cc’d the entire family, they are the ones who will end up looking foolish, although they are attempting to make me look foolish now. It’s too bad that it will be some years before we’re all proven right about the upcoming crash severity and length. (and, they will probably quietly struggle along financially for many years afterward without any of us being the wiser).

I was awake most of last night stewing about this, and in tears due to the very mean things that were publicly said to me. Unfortunately all of the family will now be mad at me for causing what will probably be a semi-permanent rift. The only way forward that I can see is if & when they are proven wrong in the coming years and are in a bad financial situation, they might admit I was right. But, I doubt this will happen, it will be too painful for them. Guess I just should have kept my mouth shut for all the good it has done, leaving me feeling like the unwanted evangelist in the room (albeit with a better supported belief) 🙂

My mistake was to not realize the intensity of their belief in the cult of real estate, and that any appeal to reason would be met with vitriol, as with any other cult. “

– ‘JCH’, via e-mail to vreaa,21 Mar 2012

Ben Rabidoux – Population Growth And Density Do NOT Justify Vancouver’s Housing Prices

Ben Rabidoux at ‘The Economic Analyst’ has posted an article ‘Population density and house prices: Should Vancouver command such a premium?’ [21 Mar 2012].
Ben shows us that (1.) dwellings are increasing in line with population growth, (2.) Vancouver’s ‘premium’ is completely out of proportion to its population density, and (3.) that Vancouver rents don’t show any premium. The bottom line is that “land constraints and population density simply cannot account for prices at these levels. Vancouver house prices are being driven and sustained by a credit boom of historic magnitude in Canada.”
The two graphics showing pop.density vs prices, and pop.density vs income.multiple, are very elegant, and put into pictures what Vancouver bears have known all along. Vancouver is very, very overvalued. – vreaa

Renting Realtor Wants Renter To Buy – “He went on at me about how he can’t stand to see me throwing my money away on rent and that my wife and I need to get ourselves into a little “fixer upper” in the North Shore. Funny thing – he rents – thinks it’s great.”

“My realtor called me a couple of days ago. He does not appreciate the extent of my knowledge about the market, finance, economics, global capital flows, credit markets, asset inflation, leverage, oh – – and the concepts of net present value. He also has probably never read a real estate blog. …
He basically went on at me for about 30 minutes about how he can’t stand to see me throwing my money away on rent and that my wife and I need to get ourselves into a little “fixer upper” in the north shore. There are so many you can get for under a million. He went on to give me all the realtor speak – – – But I do not argue because it’s not possible. Funny thing – he rents – thinks it’s great. Also said HAM not here any more – things are dead. Very difficult to move a house in Richmond right now and mid to high end not really selling. This must be a bad sign because he has never admitted such. Even 5 months ago things were as “busy as ever” even while stats would show otherwise.
This city is delusional and to use a partial quote from the recently departed Goldman exec . . “A visitor from Mars . . . . would wonder if we practice some type of voodoo economics in Vancouver and the entire city is brainwashed” .”

zrh2yvr at VREAA 14 Mar 2012 7:13am

Graphic – The Ephemeral Nature Of A Speculative Bubble

– this elegant graphic from npr. Thanks to ‘Jeff Murdock’ to pointing it out to us.  The vulnerability of a bubble, poignantly portrayed.

“I was looking around a bit in 2005 but not ready to buy. My poor timing cost me one of these Kits style ‘Arts and Crafts’ in East Vancouver; since fully renovated and worth $1.4M. It sat on the market for 2 months in 2005 before selling for $365K!”

2782 ETON ST (V935487)
“Old timer” SFH; 1577sqft (with 988 unfinished), 33×125 lot
Asking $719,900
SOLD for $820,000 on 6-March-2012 after 11 days on the market

“I love the house.
It’s a Kits style “arts and crafts” in East Vancouver.
I was looking around a bit in 2005 but not ready to buy. My poor timing cost me one of these on Gravely that was since fully renovated and now worth 1.4M. Funny, it sat on the market for a couple of months in 2005 before selling for…$365,000!”

– from eyesthebye at RE Talks 16 Mar 2012 1:29pm

“All my doctor colleagues think I’m nuts to continue renting, but quite frankly, if I get a big fat mortgage and a nice fancy “doctor house”, I won’t be able to retire.”

This personal account from Tina, a doctor making $350K pa living in Vancouver Westside in a $3Million house that she and her husband rent for $4K per month (as featured by Garth Turner at 16 Mar 2012):
“I had anger and bitterness towards the unaffordable market. Last year, I was one of those “house horny” individuals looking to get into the market. After losing out on 4 bidding wars and building up a hatred for lying, arrogant RE agents on the Westside, my husband and I decided to stop looking. It was ruining our lives! I didn’t know who was on the other side of the bidding wars but whether or not it was an Asian immigrant with a million cash or some other crazy westsider like me, it didn’t matter. Thank goodness we found For those who comment on the fact that prices are not dropping, maybe they need to see the daily “red sheet” for the Westside that I still receive every day.
As a physician that earns approx $350k per year, this rent is affordable and still allows us to save, invest and be able to retire in 25 years. But the discrepancy in what I can rent compared to what it would cost me to buy the same house is huge! Of course all my doctor colleagues think I’m nuts to continue renting, but quite frankly Garth, if I get a big fat mortgage and a nice fancy “doctor house” as I like to call it, I won’t be able to retire….”

And the following in the comment section from another MD:
“My wife and I are happily in a similar situation. Only one other colleague that I know of in my age cohort is renting. Numerous others have large mortgages. Our department is having a very hard time recruiting because new MDs cannot afford housing in Vancouver.”
Burnt Norton,, 16 Mar 2012 10:05pm

Sensible doctors can’t buy “doctor-houses” in Vancouver.
Vancouverites may not realize this, but this is a problem.
There is pressure on doctors to simply move to places where they can buy accommodations of a standard commensurate with their earning ability.
(And don’t anyone volunteer that they could easily buy a townhome in East Van with that kind of income. That is entirely missing the point.)
– vreaa

Spot The Speculator #75 – “At the age of 72, she feels poor. Ironically, she has substantial capital, including a house in B.C. and a condo in Austria that together are worth $810K.”

“A retired musician who we’ll call Helga lives in British Columbia. At the age of 72, she feels poor. She has been able to cover her expenses with pension and investment income and by teaching music. Yet she feels trapped, unable to stop teaching and thus unable to retire completely.  Ironically, she has substantial capital, including a house in B.C. and a condo in Austria that together are worth $810,000.
Helga’s income comes from Old Age Security, $540 per month, Canada Pension Plan benefits of $825 per month, Registered Retirement Income Fund distributions of $1,135 per month and teaching violin at $2,500 per month for a total of $5,000.  After tax at an average rate of 20%, she has $4,000 to spend.
“I would like to retire from teaching music at the end of this school year,” Helga explains. “But I need the money it provides. I would like to spend more time in my condo in Austria. I don’t know where to turn.”

– from ‘Impoverished millionaire’ needs to face the music’, Andrew Allentuck, Financial Post, 9 Mar 2012

Bob Rennie – ‘Real Estate is a Sport’; ‘No Parking’; ‘I Love My Prius’; ‘Buy-Downs’; ‘Emerging Communities’; ‘Ghost-Town’; ‘Front-Row-Seats’; ‘Condo-Watchers’; ‘69% Of Buyers Own Homes’; ‘Repatriating Money’; ‘Passive Investment?’; ‘Like Trading Baseball Cards’

Bob Rennie, Vancouver condo marketer, on the ‘Bill Good Show’, CKNW 980AM, Vancouver Radio, 9am Friday 16 Mar 2012 [hat-tip Keith] –

Bill Good:  ‘Marine Gateway’ is the first major development along the Vancouver portion of the Canada line. And 11,000 people have registered to buy one of the 414 condos that will be up for sale this weekend. It hasn’t been since ‘Woodwards’ in 2006 that a condo project has created this level of early interest. Bob Rennie, of Rennie Marketing Systems is with me in the studio. This seems.. hard to believe..

Bob Rennie:  Yeah, it’s hard to believe what we go through in Vancouver, compared to almost any other jurisdiction in North America, other than Toronto.

Good:  So, 11,000 people?

Rennie:  11,000.. but you have to look, at a certain level, that in Vancouver, real estate is a sport, everybody wants to know what’s new, so half those people are interested in what’s the latest and greatest steel refrigerator, and going to see new lay-outs, and then you’ve got a core group of real buyers that are lined up there right now,

Good:  And there’s a line-up as we speak?

Rennie:  There’s a line-up, of 60 to 100 people.. you know… everybody wants the best and the cheapest on any project, so that’s just sort of an expectation in today’s market… everybody wants the top with the views, and everybody wants the cheapest for their daughter.

Good: (laughs)

Rennie: … and that’s where you get that initial interest from.. We’ve been open now for a couple of months, and everybody has been coming down and previewing, and they understand what floor plan they want, they understand what view they want, they understand they’ll live with or without parking, because .. the whole thing that…

Good:  Where exactly is this?

Rennie: Right at the SE corner of Marine and Cambie, and it’s right on the Canada-Line… so you’re not going across the street, you’re just coming down and walking out… but it’s retail, and it’s office, and it’s residential, so it’s a new emerging community..

Good:  What’s the price range?

Rennie:  There’s two hundred homes under three ninety-nine… so, that’s the attraction, is that affordability

Good:  So, under 400 thousand, and you can get on a sky-train and be downtown in 15 to 20 minutes.

Rennie:  Yes, downtown.. and.. what is your producers name?, I’m sorry, I forget…

Good:  Jessica…

Rennie:  I was just telling Jessica, that if you look at the difference between Jessica, and Bob, 55, that at 55 we’re looking at do we let go of one car in the household… we understand the cost of insurance, and running a car, and depreciation, and payments… Whereas Jessica, and Jessica doesn’t have a car…

Good: No, she’s ahead of you… she gave up her car and walks to work..

Rennie: Jessica, and Jessica doesn’t need to drive to the local drive-in to find out what’s happening tonight, she has an iPhone, and that difference in communication, that difference in that generation, that they’re not addicted to the car the way the baby-boomer generation is.. So, as I’m telling developers, we can build without parking,.. they’re going ‘No, nobody’s going to buy without parking’.. but we’re here, so, juts over 100 units there without parking. We did the ‘Capital Residences’, downtown, the old ‘Capital Theatre’ site, with 102 units without parking… Peter Wall did the ‘Scotia Bank Centre’.. we did about 115 units there without parking. Jessica and her younger friends have no desire to own a car… not just because of the overhead but they don’t need it for lifestyle.

Good: They also know that they can get a car share program, or can rent a car for a weekend, and they seem to be satisfied with that..

Rennie: ..and the zipcars and the modo cars, they work in the city where there’s a concentration of cars to pick up… when you get into the suburbs and you say we’ll have one car for 300 condominiums, it doesn’t really work, because you don’t have a concentration… that’ll all change. But my thing is… the Mayor is looking at affordability.. you know, Telus has announced it’s building an office building… I think it’s phenomenal for the city.. but that’s going to be filled with employees that don’t want to drive an hour and a half home… so we start really having to look at these emerging neighbourhoods…

Good: So, you’re seeing a real transformation..

Rennie: Absolutely.. I think this year we’ll bring out 1800 to 2000 homes transportation oriented.. so Marine Gateway, and then we’re doing at Boundary we’re doing 3 towers later in the Fall, and then we’re just going to start previewing in Richmond, ‘The Mandarin’, which is the very first Canada-Line station. Not only that, you’ve got a million square feet of shopping and restaurants. Somebody told me, if you’re going to buy in New York, find an area that’s the least inconvenient to your lifestyle, not the most convenient, but the least inconvenient… so the fact that you’ve got restaurant shopping, dry-cleaners, not just a telephone store, but real usage downstairs.. and the transportation is the big win.

Good: Well, you talked about the cost of the car, the cost of insurance, the cost of gasoline,.. but another huge factor, downtown, is the cost of parking…

Rennie: The cost of parking but the inconvenience now of being in a car driving down Hornby, or driving down Granville, where do I turn right or where do I turn left?.. and if you hit the wrong time, you’re in your car for 20 minutes, as opposed to being on the Canada line, on your laptop, on your iPhone, and just walking 5 minutes. So, this under 35 and over 45, there’s sort of purgatory inbetween there… the different ways that we look at the vehicle..
… [commercial break] …

Good: You think you’ll come close to selling out the 400+ condos, in a weekend?

Rennie: I would think, with the level of activity, and people lining up, that we will sell 90% of it on Saturday…

Good: You just told me you gave up your big fancy car, for a Prius… Are you trying to move into a generation below you?

Rennie: I’m trying to understand.. when I turned 50, I wanted a fancy car, I’ve always promised myself I would, I still get up 4:30 and work seven days a week.. but, after 2008, I was self-conscious of a fancy car, and was only driving it once a month, I thought, let’s let it go… and, my son didn’t think I’d last with it, but they got me a Prius, and I love it

Good: And you actually drive yourself?..

Rennie: I drive myself, yes (laughs)

Good: Because the last time I saw you you were getting into a great big black Mercedes, with a driver…

Rennie: The company has a Mercedes hybrid, that my assistant, Sylvia, stays with me 7 to 7, ‘cos all my business is running from boardroom to boardroom, from developer to developer in the downtown, and, when you look at driving and you look at parking, it’s just.. I like my assistant with me… so she stays until 7 o’clock and then, after that, I’ve got my Prius, I love it..

Good: But I thought it was interesting, you’re talking about a generation, and Jessica is among that generation, she gave up her car, a year ago, she walks to work… and you’re talking about people buying on the Canada line and using the transit system and being reliant on that.. and they don’t really need a car except on occassion…

Rennie: We’re building all our new developments on affordability – Jessica -, and then, the baby boomer – Bill and Bob – and, you know, this baby-boomer generation, which is 47 to 66 years old, they don’t have as much money to play with as they thought they had, they’re not taking the risks that they used to take..

Good: Interesting..

Rennie: And, for Jessica, they have this 500sqft 1 BR with no parking on transportation, 3/4 of the building still has parking, because we can’t shift culture that fast…

Good: The baby-boomer, I suspect, is thinking of driving less.. perhaps having one car instead of two..

Rennie: They’re driving the Prius; they’re driving a hybrid, because it’s socially acceptable… you don’t have to say “I don’t want to spend $150,000 on a car, I only want to spend $32,000 on a car”, and it’s socially acceptable to be green.. and if you look at the shift with the baby-boomer, they’re protecting the money that’s left.. you know I can throw the Olympic Village into here, we’re just launching Canada House, the Arthur Erickson inspired.. on the water.. it’s 40 homes, they’re a million dollars plus, but, the homes that are selling for one point five to three point four million are ‘buy-downs’… it’s people who are selling their West-side home that foreign money happens to be buying, it’s not for the local market anymore, and then that money is being repatriated to a ‘buy-down’ in a place like the Olympic Village. Ten years ago, the West-side buyer thought “it goes Granville to Province of Alberta”, there was nothing in-between.. and now, that baby-boomer, everybody’s thought pattern has shifted.. the Olympic Village is an emerging neighbourhood, Canada Line is an emerging neighbourhood, Woodwards is an emerging very conscious mixed-use diversified community, but it’s emerging…

Good: Now, the whole Olympic Village, that was such a controversy a couple of years ago.. it has really emerged, I saw the story the other night… 65% sold now…

Rennie: We relaunched it with the receiver, February 17th of eleven, and we invented this name ‘ghost-town’.. we went out to the media and we said “it’s a ghost-town, let’s be really transparent”.. there was a perception about the Village that it was failing.. and so we thought that if we put the ‘ghost-town’ on it.. Now, I’ve always though that, that community being on the sea-wall would stabilize and it’d be okay.. and there was 472 of the 737 condominiums sold.. you go down there it’s hustling-bustling.. Terra Breads has opened, you can’t get a seat in it.. Urban Fare we expect to open before the summer.. London Drugs is coming… the community is being built out.. so now that the asset is stabilized we recommended to the receiver that we can now bring on the front building, which is two small buildings, one with 40 units, one with 20…

Good: This is the high end.

Rennie: This is the high end… front-row seats right on the sea-wall.. starting tomorrow, Saturday, for two weeks it’s open to the public, after that it’s by appointment… You know, this one million to seven million dollar inventory really isn’t an open-house inventory.. but there’s a lot of real estate sport condo watchers and Olympic Village condo watchers, and where did Sidney Crosby speak condo watchers.. sleep.. condo watchers that’s where our Olympic team stayed was in Canada (House)..

Good: So where is the market for that.. is that a local market.. off-shore market, or both..

Rennie: it… we can tongue-in-cheek say it’s not.. it’s not off-shore… it is a local market..

Good: People downsizing?

Rennie: People downsizing.. they’re selling their West-side homes and they’re repatriating that money.. which is breathtaking (laughs).. to other jurisdictions, such as the Olympic Village. And, the Olympic Village, I needed 2.5 to 3 years to sell it, stabilize it, and earn the brand back.. when we bring on a Marine gateway, you go down, you put 10% down, and within a year you’ll have a 25% deposit and 33 months from now you’ll pay for it. So Bill and Georgie can figure out do we need it to live in?, do we put the kids in it?, are we going to spend more and more time on the coast?, do we just keep it as a passive investment?

Good: He’s trying to sell me!

Rennie: ..but I can’t get you ahead of the line!.. But you’ve got that 33 months to figure it out… But if you buy at the Olympic Village, within 60 days I want all your money. So you have to have been selling your home or selling your home (sic). Stats, if you’d like them, Bill, is that 69% of all homes sold in Greater Vancouver, are to people that already own a home. The other 31% are to first time buyers.

Good: So there’s still a first time buyer market?

Rennie: There’s still a..

Good: There has to be.. doesn’t there?

Rennie: But I think the deception, after my recent address, putting the numbers together.. I think the part we have to understand, is that this first time buyer, when we say we’re the most expensive place to live, is based on incomes, but the 69% of buyers already own a home, it’s an equity play, they’re just trading baseball cards.. But the 31%, I’m trying to understand.. so, I’m putting the figures together.. of the over 55 year population that owns their homes clear title, and that 55 to 74 year old, when they’re selling their home, they’re helping the kids and the grand-children… they’ve… (my stats guys) and I were joking the other day that we’re gonna make t-shirts that say “My grandparents bought a home in 1978, and alls I got was a lousy one bedroom condominium”… because that money is being repatriated down to help the kids..

Good: OK, we’re almost out of time..

Transcribed here, for the record. -ed.


“We just spent a frustrating week trying to buy one of these expensive houses. Agent would not put in our offer. Said we should offer something “reasonable” when we wanted to go in at the assessed value of the place.”

“We just spent a frustrating week trying to buy one of these expensive houses. Agent would not put in our offer. Said we should offer something “reasonable” when we wanted to go in at the assessed value of the place (tear downer, asbestos, needed repairs).Told us what the seller’s bottom line was. Didn’t like that we had the condition of selling of our condo (suggested we move into a rental so we had “more money”). Then, discussed what we were going to offer when viewing the home with other realtors & buyers present. Welcome to Vancouver. You can’t even put an offer on these overpriced homes as the agents don’t want to see purchase prices come down. Now, we are without an agent, and the house is still for sale. This was almost as bad as being told previously, “don’t even bother putting in a low offer on this place – we just had a busload of Chinese come through and they are extremely interested” (actual quote from realtor). Obviously, to show that home values in Vancouver are not coming down, no sale is better than low sale. Are agents acting in solidarity together? Sure seems like it.”
For Sale But Not To You at VREAA 14 Mar 2012 12:27pm

“I’ll say only that homeowners are definitely not prepared for prices to go down. Real estate has enjoyed a long upward cycle and with 12 good years comes a high degree of complacency.”

“When I pull together the economic fundamentals, valuation and sentiment, real estate, as an investment, doesn’t look very attractive. The distribution of potential outcomes looks asymmetrical to me – limited upside and plenty of possible downside. But what really screams out at me is how many important factors are at extremes … bad extremes. One or two off-trend numbers can be explained away, but too many are jumping off the charts – price increases, mortgage rates, loan growth, consumer debt and home ownership levels.”
– Tom Bradley, President of Steadyhand Investment Funds, in an article ‘Real estate as an investment? Look elsewhere’, Globe and Mail, 16 Mar 2012. [hat-tip Derp]

The brief article is worth the read.
Most here will be familiar with all of the arguments.
A succinct, measured analysis. I like it because it has something of the “a Martian approaches the Canadian RE market” about it.
Needless to say, we agree strongly with his conclusions.
– vreaa

Read Before You Rent… – “In my 25 years of renting apartments in Canada, I’ve never before had this trick pulled on me.”

[text in window]

“read before you rent ->

In my 25 years of renting apartments in Canada, I’ve never had this trick pulled on me.

We found this lovely place last March.
When we signed the lease, the landlady had pre-ticked the box that said we would vacate after our one-year term.
We said “oh no, we’re looking for a place to live long term. We’d like to go month-to-month after that.”
She said she would negotiate a new lease with us next year and that this is how she does things.

We very soon found out why…

Later that spring, I asked her if I could put in a garden and she said I could put pots on the conrete and slabs where I have put pots.
After I invested $500, and the garden was in full bloom, she said I had to redue to 2 pots – one each slab.
We refused and stood up for ourselves, as the garden gave us and all of our neighbours great pleasure and no problem.
She backed down at the time, but now refuses to negotiate a new lease with us.

We paid our rent on time every single month. PLUS we asked permission for our garden first, and she said yes!

We arent going to bother going to the rental tenancy board.
Shorly after moving in, we watched her do this to a young professional couple who were 8 months pregnant at the time, and the adjudicator at their hearing said “you shouldn’t have signed the lease with the vacate box ticket – I can’t help you.”
And watch, this woman won’t sign a lease with you any other way.
She wants absolute control and she escalates all situations to anger and tells you to move if you don’t like it.
So, beware.
Lovely home. Horrible landlady.


She’s a master at using this trick to legally force tenants out.
Good Luck!”

[The above care of ‘Aldus Huxtable’, via e-mail, who adds “Spotted whilst out on a walk, one for the archives? An evolved by-product of amateur landlords? Perhaps we will see a lot of speculators resort to odd maneuvers to make the increasing mortgage payments if rates were to increase. Who knows what this landlord’s motives were, but, in a city where renting is propping up the market….”. (Thanks, Aldus. -ed.)]

Tale Of Two Characters – Van East and Frank Lloyd Wright

In relation to a post regarding the sale of the above Van East SFH for $1.45M, commenters were debating what constitutes a ‘character’ home. The example below care of ‘FML Listings‘ (a Toronto RE blog). We’d say this was a character home:

Thomas H. Gale House, Oak Park(West Chicago), Illinois
Architect: Frank Lloyd Wright
Built: 1892
Asking price: $1,295,000
HOUSE HISTORY: Wright’s design for this house was derived from the more expensive residence he had designed earlier in 1892 for Robert Emmond of LaGrange, Illinois. This home and its twin, the Robert Parker house, were built later that same year by Realtor Thomas Gale.
The Gale and Parker Houses are of interest for what they reveal about Wright’s development as an architect. Their irregular composition, consisting of octagonal bays joined to a rectangular core, the whole covered by high-pitched roofs with octagonal dormers, reflect the style of design of Wright’s first teacher, Joseph Silsbee. The influence of Louis Sullivan, especially his philosophy of “geometric simplification”, is seen in the taut masses of these houses, made clear when contrasted with the more ample rounded forms of true Queen Anne designs so popular at that time.
The Thomas Gale house has been completely restored and updated. A new ‘off footprint’ addition include an expanded kitchen and master bathroom, each designed to blend into Wright’s original design.

There you have it.
Frank Lloyd Wright in Chicago: $1.3M
Van East SFH: $1.45M
– vreaa

“I have been a long time bull but it’s becoming pretty clear that the cracks are showing. Two years ago I laughed at predictions of a 50% drop in prices but it no longer sounds quite as unlikely as it did.”

“I have been a long time bull but it’s becoming pretty clear that the cracks are showing. Two years ago I laughed at predictions of a 50% drop in prices but it no longer sounds quite as unlikely as it did.
I am tempted to try and sell my clear title home but I love living in it and I still think a decade-long, shallow decline in prices is still possible and I don’t want to sit on the sidelines renting during my twilight years, even though it’s beginning to look like the financially smart thing to do. If I was young I’d be looking forward to my first open house.
I do worry about friends who have second properties (condos) that they rent out, if interest rates climb, inventory explodes and the number of renters doesn’t grow proportionately, things could go very badly for them.
I’m fairly confident my home will be worth a lot less in the not too distant future but not confident enough to take the chance of selling at this time in my life. I do believe current price levels will eventually return but it could take decades.”

axeless at VREAA 13 Mar 2012 7:21pm

[Thanks very much, axeless, we largely agree with your outlook for the market.]
This is an important story as many Vancouver owners are in similar positions.
How will they respond to relentlessly sliding prices?
We don’t think many will show as much sang-froid as axeless.
We suspect many are dependent on the value of their homes for their financial futures, and will try to realize their paper profits as prices fall.
– vreaa

Inventory High And Climbing

– chart from b5baxter at, who adds “Inventory is at record levels for this point in the year. The graph shows that it is at the highest point [for March] in 7 years. If other sources of data are included I believe it is actually at the highest point [for March] in 11 years.”

“Feb 2012 active listings were 17.9% higher than February 2011.”
– Vancouver RE Board

East Vancouver SFH Sold For $1.45M

2252 VENABLES Street Vancouver
3,030sqft SFH, built 1924, 33×122 lot
Sold $1,450,000

– hat-tip to ‘J.’, who sent this along to VREAA by e-mail, and who also adds:
“Bought for around 650K (my friends are neighbours, so have watched this unfold over the last couple of years), renovated and now sold for 1.35 million. [Actually, 1.45 million, according to commenter ‘reality check’. -ed.] The renovations are nice, but they’re not that nice, and they’re nothing special. There’s issues with the floorplan, too: the upstairs bedrooms have no bathroom, so if you need to pee in the middle of the night you have to go down the stairs, into the den, and through the kitchen. There’s no yard to speak off: just a patch of grass at the back. This used to be a sort of affordable (by recent Vancouver standards) part of town, as well.”

Calgary’s ‘Attainable Homes’ Program – “We give you the required down-payment (yes, it’s a gift!). You come up with $2,000 of your own money. You get a $240K home.”

Thanks to ‘Zerodown’ for (aptly, given his handle) pointing out the ‘Attainable Homes‘ program now running in Calgary. The following from their website:

“How it Works”

Over the last few years, housing prices have increased significantly yet Calgarians’ earnings haven’t kept pace. This has created an affordability gap. High rent payments and other monthly expenses leave little to no ability for many people to save for a down-payment and own a home. Attainable Homes Calgary is here to bridge the affordability gap and help hard working, middle-income earners like you, get out of renting and into home ownership.

Our Program

Through our program, we do three things a bit differently in order to provide Calgarians with attainable homes:

  1. We partner with reputable local builders to provide condominiums and townhouses at a price that is attainable for middle income Calgarians. We define ‘middle income’ as having an annual household income under $80,000.
  2. We give you the required down-payment (yes, it’s a gift!) and guide you through the entire purchase process. You will need to come up with $2,000 of your own money as a deposit, which is put towards the purchase price of your home.
  3. We re-invest a portion of your home’s appreciation back into the Attainable Homes program to help other Calgarians buy a home. You have the freedom to sell your home at anytime.

Let’s work through an example:

$240,000 Home at Market Value:

Attainable Home purchase price $220,000
Less 5% gifted down-payment* from AHCC ($11,000)
Your cost $209,000
Your minimum deposit $    2,000
Your mortgage (from lender) $207,000

*the gifted down-payment becomes a forgivable loan.

When you decide to sell your AHCC home, you and AHCC share the appreciation in value (you keep more, the longer you own your home):

Years of Ownership Appreciation to Home Owner
0 – 1 year 0%
1 – 2 years 25%
2 – 3 years 50%
3+ years 75%

Let’s say you stay in your AHCC home for four years and the appraised value is now $254,700.

Market Value of your AHCC home $254,700
Less your original deposit $   2,000
Less your first mortgage amount $207,000
Appreciation $  45,700

Your share of the $45,700 appreciation would be $34,275 (or 75%).
Our share of the appreciation, which we’ll reinvest in the program would be $11,425 (or 25%).
What a great opportunity… everyone wins!

Get on the path to home ownership! For more information or to book an appointment with a member of our sales team, contact us!

Our thoughts:
Not seeing it as sufficient to subsidize mortgage insurance through CMHC, governments are now gifting the down-payments on which those mortgages are extended. This is complete insanity. Leverage upon leverage.
Should anyone who can only come up with $2k ever be given a loan of $207K?
(Sub-prime, anyone?)

Clearly the government is also aiming to support “reputable local builders” and others. See the program’s partners and sponsors.

We note that there is no provisor on the “How it works” page for the possibility of future price drops. Possibly:
Let’s say you stay in your AHCC home for four years and the appraised value is now $140,000.

You still owe $200K on the mortgage.
You couldn’t come up with more than $2K to buy the home, but now you’d need more than $60K to sell it.
You mail us the keys and leave the province.
Everybody wins… (no.. wait..!)”

Homes will be more affordable for all when their prices fall to levels reflecting fundamental values.
Endeavours like the one above simply facilitate citizens overextending themselves to buy overpriced properties.
If the ‘City of Calgary’ understood the situation, and really cared about “middle income Calgarians”, they’d not promote this program.
– vreaa

“How bad do you REALLY want a house in Vancouver? Part of being an adult is making sacrifices.”

The following comments found below the article ‘Would-be homebuyers shocked at Vancouver prices’ [ 12 Mar 2012] that deals with a local couple with $315K to spend seeking a 2 bedroom condo somewhere in Vancouver:

“I read the comments here [at] and it reminds me of what everyone was saying 20 years ago…it’s too expensive, nobody can afford it…
20 years ago we bought in E Van for 300 grand, at 12 percent interest! That was a mortgage of 2700 a month. The same money today pays easily 600,000.
Give up all the crap you don’t need like car payments, vacations, fancy restaurants, fancy clothes, electronic this and thats and you’ll have the money.
It’s just a matter of priorities. How bad do you REALLY want a house in Vancouver?”

– kdrkim, 13 Mar 2012 12:44pm

“No sympathy here. Part of being an adult is making sacrifices. Everything you want isn’t always in your budget so you have to decide what is truly important to you and go after those things rather than sitting there complaining about how it’s someone else’s fault.”
– nsrv726, 13 Mar 2012 12:46pm

“I would like to be able to have this in East Van? Is that too much to ask?”
“Yes, that is too much to ask.
You want a Mercedes at a Chevy price. And yes, that is too much to ask.”

– CBCFanzine, 13 Mar 2012 9:28pm

“I think it’s unfair the cost of Ferraris are out of my reach. It’s not fair that I have to settle for a Honda.”
– ClosetIguana, 13 Mar 2012 8:18pm

“According to the graph he is making considerably less than the median income and he wants to live buy a place in downtown Vancouver or East Vancouver so he can be ‘be close to his friends’.
He thinks like a 12 year old haha.”

– cbcbcc, 13 Mar 2012 6:36pm

“Buddy has a choice to make: get a job that pays more money or move to a community he can afford. So tired of these whiners. Why does CBC put these ‘entitled’ people on the air? This guy is no victim.”
– jawardwinner, 13 Mar 2012 2:30pm

These comments headlined here for their common theme, that of “Those who complain about high housing prices in Vancouver simply have unrealistic expectations”.
The statement is disarming; it makes those who point to the housing bubble seem like spoiled children, they stand accused of being “entitled”.
This is convenient for those who seek a continuation of the status quo. The implication is that folks should stop being critical and get with the program (and prop up the market). The proponents often encourage prospective buyers to “work harder” but, of course, what they really mean is “borrow more”. Housing prices in Vancouver are most definitely not driven by earnings, they are driven by high leveraged borrowing.
Bubbles, by their very nature, overtly and covertly ‘conspire’ to perpetuate themselves; it’s hard to criticize them when they’re underway without looking superficially like a partypooper or a whiney brat.
– vreaa

“You can tell a lot about this west-side tear-down bungalow listing for close to $3Million.”

3928 W 34th Ave, Vancouver
1950 SFH, 2411 sqft, 66×130 lot
Asking price: $2,988,000

“Prime building lot west of Dunbar!”
You can tell a lot about this listing at close to three million dollars for a west side tear down bungalow in Vancouver.
First, this house was built in 1950 and it looks like very little has been done since.
Second, the house is being sold by a caucasian real estate agent which indicates that the owners are long term owners who are caucasian.
Three, this house will be paid for in cash with money from China.
Four, this house will be torn down and a new monster house will take it’s place.
Vancouver is a city that has had the guts of it’s middle class ripped right out of it.
Vancouver is quickly going from being a city to a theme park for the rich.
Within a few years the largest city in BC will be Surrey and not Vancouver.
Vancouver city is closing elementary schools and downsizing this educational system because the people buy these houses do not have children this age, and the ones that do have gone to the suburbs long ago.
Within one block of the epicentre of the Stanley Cup riots last year are new condos going up that top out at over twelve million dollars.
The peasants in the street rioting are almost all from the suburbs.
The cops who are defending the city, and who work for the city, almost all live out in the suburbs too because they can no longer afford to live in the city that they work for.
The Vancouver Police Department used to have a policy that employees had to live in Vancouver, but that was discarded long ago when they discovered that their employees could no longer afford to actually live here.
Vancouver = a postcard city.
Nice on the surface, like a Hollywood movie set.
But look a little closer and rage and anger here is manifest.”

John at 10 Mar 2012 3:46pm

Largely agree with the sentiment.
BTW, houses like these will sell for , say $999K, or less, in the trough (and, yes, prices like $999K will return – less need to bother with all the eights. In fact, eights may even be actively avoided as too redolent of the boom-‘n-bust.)
– vreaa

Out-migration – “It’s simply not worth it to pay a million dollars for a dump to live in the rain and act like the only thing in the world is Canucks games, hating Americans, doing the grind and Starbucks.”

“Just about any professional with ambition considers moving to the US at some point based on my experience.”
Airedales at VREAA 11 Mar 2012 7:08pm

“That’s what I did. BA, B.Sc MBA, UBC. Old friends from high school went right down to the USA became surgeons and live in real world class cities (NYC) and aren’t coming back. They only people left in BC, are slum lords or at literally the same job for 20 years selling appliances in a department store and getting older. Others teach at the same BC high school they went to and their kids are now going to. Some went to Toronto and rest went to Europe. It’s simply not worth it to pay a million dollars for a dump to live in the rain act like the only thing in the world is Canucks games, hating Americans, doing the grind and Starbucks. Most of the time you can’t even see the so called scenery. I bought years ago and sold all my properties.”
Ed at VREAA 11 Mar 2012 9:29pm

“Don’t be fooled, there is a lot of money in Vancouver. My aunt is selling her westside house and that will free up 3 million dollars of which my two cousins will each get a million to spend on the east side of the city.”

“Vancouver is cheap in relation to China. It is not cheap in relation to local incomes apparently but don’t be fooled there is a lot of money in Vancouver. My aunt is selling her westside house and that will free up 3 million dollars of which my two cousins will each get a million to spend on the east side of the city.”
reality check at VREAA 13 Mar 2012 10:13pm

Note how the “lot of money in Vancouver” is completely dependent on the West-side house being imagined to be worth “3 million dollars” and how the east side sales (and imaginary values) will depend on the westside sale.
Also note how those three transactions would result in an injection of millions of previously non-existent dollars into the local economy. They won’t be “freed up”, they’ll be created out of thin air and the belief, the ‘faith’ if you will, that the westside house is ‘worth’ $3Million.
Our city is completely and utterly dependent on the proceeds of the RE fantasy.
All of this will turn on a dime once significant price drops declare themselves.
Deleveraging is the reverse process, where fantasy becomes nightmare.
As we’ve said before, the RE crash will be the defining social and economic event of the next decade.
– vreaa

Mouldy Old Favourite Makes Reappearance

3804 W 10th Ave, Vancouver V935681
2000sqft SFH on 34x122ft lot
“Character home in Point Grey. Peaceful neighbourhood. Convenient location to best schools, shops and transportation. Clean and tidy home. LAND VALUE ONLY. Could be lived in or build later.”
Asking price: $1,200,000

Previously featured on these pages January 2010 when it was on the market for $1,300,000. [Hmmmm. -ed.]
Yeah, yeah, okay, lot ‘value’, sure, but you gotta love the “Peaceful neighbourhood” descriptor:

“My sister has been trying to sell her lovely Richmond character home for months now. Very few calls and no offers. Two price reductions and counting. I’ve told her to take the nearest reasonable offer, but nothing yet.”

“My sister has been trying to sell her lovely character home albeit on a busy street for months now in the epic center [sic -ed.] of asian lust, Richmond, BC. Very few calls and no offers. Two price reductions and counting. I’ve told her to take the nearest reasonable offer, but nothing yet. I fear they will be stuck with this place for a lot longer. Fortunately they paid about 25% less than the current listing price, but it looks like if they really want to sell, they’ll be be lucky to walk away with much in the way of profit…. BTW, listing is still over 1 Mil.”
JW at 9 Mar 2012 at 11:05pm

Realtor Opinion – “These prices are the reality of our city, and the people who “over pay” for their purchases will rest easy knowing that if you buy and hold, property is the safest investment in the world!”

“Things look pretty out of control, that’s a given. As crazy as the market in Vancouver seems, what we have to accept is that any piece of property is worth exactly what someone is willing to pay for it, and not some calculation/forecast made sight-unseen for the purposes of taxation (for example). These prices are the reality of our city, and the people who “over pay” for their purchases will rest easy knowing that if you buy and hold, property is the safest investment in the world!
We can certainly keep shaking our heads at the perceived Madness of the prices paid, or we can try to shake off the feelings of “Wow, this is just nuts! When does it end?”, and get in while a Basement suite is still AFFORDABLE at $589k!
“The end is in sight” doesn’t apply to something that never has an end. There are deals out there that appear better than this one, by almost any measure, so get the deals while we can, because the dreams of those like myself who grew up in Vancouver, of owning property and living our life out here, are only going to get more “Dream” and less “reality” by the day!
Good luck to all land-owning hopefuls!”

– comment at VREAA posted by ‘Adam Janusz, RE/MAX Select Realty’, 13 Mar 2012 11:36am

A Vancouver realtor’s volunteered opinion on the market, circa March 2012.
Archived here for posterity.
– vreaa

“When I look at the actions of governments, I cannot figure out whether they are mostly stupid or mostly dishonest.”

“For most of us, housing is our biggest expense. One out of every five dollars we earn goes to build, buy, rent and run our homes. Facing high home prices, large personal debts, and an uncertain economy, fewer Canadians can buy a new home today than in the past, and they are choosing to rent instead.
Unfortunately, in many cities finding an affordable place to rent is nearly impossible. The most immediate problem is supply. Vacancy rates under 3 per cent push rents up. In Vancouver and the Greater Toronto Area, it’s 1.4 per cent.
Vacancy rates this low force our young people to move out of the city, threaten seniors on fixed incomes, and have a negative impact on local businesses.
That’s why this spring’s federal budget must put Canada’s rental housing market on solid ground, by pursuing low-cost, high-leverage policies that get jobs on the ground and build housing Canadians can afford.
Building and renovating rental housing will give cash-strapped Canadians more affordable housing options at a time when they’re being increasingly priced out. It will also create thousands of construction jobs to replace the 50,000 lost to slower new housing starts.
We’re calling on the federal government to use its spring budget to introduce cost-effective market incentives to encourage private-sector investment in rental housing.
These include:
• Low-interest loans underwritten by the Canada Mortgage and Housing Corporation (CMHC) to finance new rental construction.
• Tax reform to encourage owners to renovate and retain rental properties, providing an incentive to preserve affordable rental housing.
• Help for landlords to make rental housing more energy efficient, reducing costs and easing pressure on rents.”

Gregor Robertson, Mayor of Vancouver, in an article co-authored with Joe Fontana (Mayor of London, Ontario) in the Toronto Star, 7 Mar 2012

This from the discussion at 12 Mar 2012:

“Why build apartments when developers can make quick and obscene profits on shabbily built condos and walk away even before the expiration of their faux warranties?
The only thing that will truly encourage construction of rental stock is a return to sanity in housing prices.”

– chilled, 12 Mar 2012 10:30am

“…“they” will start building affordable, quality rentals when people stop buying high-priced, crappy condos.
The construction industry is simply doing what makes them the most money. If you want someone to blame, blame the buyers and the governments which enable them.”

– patriotz, 12 Mar 2012 5:02pm

“Right, like the current government that decided to give ten grand to people buying a first home, which is to say, they decided to give ten grand to any developer who sells to a first time buyer, which is to say that they arranged for it so that rentals would have to bring in ten grand more to be competitive with sales. As often happens when I look at the actions of governments, I cannot figure out whether they are mostly stupid or mostly dishonest.”
– N, 12 Mar 2012 5:45pm

By the way: A plan for “tax reform to encourage owners to renovate and retain rental properties” means that tax-payers will be subsidizing landlords; this will apply even more government-backed upward-pressure on housing prices in Vancouver.
Governments can really make a hash of markets. Case in point: the CMHC itself was created with the idea of making housing affordable; by mis-pricing the risk of lending, they have supported a speculative mania in housing and made housing less affordable.
Frequent readers know our position very well:
No government can design a solution for Vancouver’s dilemma; we are trapped in a monstrous speculative mania, there is no way through but price collapse.
Government policies may precipitate the collapse, or they may give cocaine to the dying racehorse and let it limp along for a while longer (drawing in even more buyers for the slaughter), but, whatever a government does will not put off the inevitable outcome of a bubble.
– vreaa