Unstoppable?

Posted on 3 June 2017 | 117 Comments

May 2017 – REBGV New Average Sale Price Highs:
Detached $1,831,000
Attached $859,000
Apartments $657,000

This entry was posted in 05. Where do Buyers get the money?. Bookmark the permalink.

117 responses to “Unstoppable?”

  1. Keith | 3 June 2017 at 3:50 pm | Reply

    Be it resolved, prices have room to go higher.

    Pro side:
    1. With 40,000 people per year moving into the region, foreign investment, and new projects routinely selling out in a matter of weeks, demand continues to exceed supply.
    2. Money is cheap.
    3. Alternative investments to real estate are perceived as “too risky” and returns aren’t worth it in a low interest rate environment.
    4. Vancouver real estate is less and less a home, increasingly a rental property, an Air BNB, a VRBO, an option to be flipped.
    5. Single family homes are being torn down at the rate of 3 per day, so ever decreasing supply. The townhouse alternative to houses is in such short supply, prices now in the $1000 per square foot price range.
    6. The boomer downsize/release the equity into the market still in the early stages, process has ten+ years to play out.
    7. Rules put in place by government to curb speculation etc. turn out be ineffective in the real world.
    8. The city of Vancouver has 50% renters and near zero vacancy rates, representing a large pool of potential owners and the ability of property owners to sustainably increase rents at above the cost of living.
    9. Spot rezonings successfully continue and increase in pace, making land assembly possible throughout most parts of the city, effectively making most lots townhouse + zoned, pushing valuations higher.

    Con side:
    1. The last time liquidity was tightened briefly in 2009 house prices fell about 20% in six months, proof that bubble will burst on credit tightening.
    2. Money is more likely to be more expensive in the future, than less. U.S. is already tightening, and Canada’s economy is growing in the high three’s despite Trudeau being P.M. Or because Trudeau is P.M. Let your personal politics decide.
    3. Prices are part of a speculative bubble, which will inevitably burst with prices falling like the U.S. property crash.
    4. NDP/Green coalition will last long enough to focus on real estate speculation and take real action, causing a chain reaction that pops the bubble.
    5. NDP/Green coalition introduce left wing economic policies too much too quickly, causing capital strike and made in B.C. recession that torpedoes the real estate market.
    6. Other cities become more attractive to foreign investors.
    7. Trees don’t grow to the sky

  2. El Ninja | 4 June 2017 at 12:44 pm | Reply

    My point-by-point comments…

    Pro side:
    1. With 40,000 people per year moving into the region, foreign investment, and new projects routinely selling out in a matter of weeks, demand continues to exceed supply.

    > First, we need to look at net numbers. Second, “region” is not land-constrained. Third, need to distinguish demand for housing from speculative demand, the latter being fickle when prices revert.

    2. Money is cheap.

    >This is a huge driver. Question is, will it remain so? Almost certainly not. What happens when cost of money goes up?

    3. Alternative investments to real estate are perceived as “too risky” and returns aren’t worth it in a low interest rate environment.

    >Don’t understand “aren’t worth it in a low interest rate environment”. If anything, low interest rates have goosed equity returns.

    4. Vancouver real estate is less and less a home, increasingly a rental property, an Air BNB, a VRBO, an option to be flipped.

    >AirBNB is everywhere. It is unclear that this should be a factor in propelling prices.

    5. Single family homes are being torn down at the rate of 3 per day, so ever decreasing supply. The townhouse alternative to houses is in such short supply, prices now in the $1000 per square foot price range.

    >What is source for the “3 per day” statistic and is this a net number?

    6. The boomer downsize/release the equity into the market still in the early stages, process has ten+ years to play out.

    >It could be argued that this will depress prices as more supply comes onto market.

    7. Rules put in place by government to curb speculation etc. turn out be ineffective in the real world.

    >Maybe, but from there it does not follow that prices will continue to rise.

    8. The city of Vancouver has 50% renters and near zero vacancy rates, representing a large pool of potential owners and the ability of property owners to sustainably increase rents at above the cost of living.

    >Homeownership rates are at record highs. Rent increases capped by law.

    9. Spot rezonings successfully continue and increase in pace, making land assembly possible throughout most parts of the city, effectively making most lots townhouse + zoned, pushing valuations higher.

    >??

    Con side:
    1. The last time liquidity was tightened briefly in 2009 house prices fell about 20% in six months, proof that bubble will burst on credit tightening.

    >The bubble will burst from its own weight but credit tightening will certainly make it worse.

    2. Money is more likely to be more expensive in the future, than less. U.S. is already tightening, and Canada’s economy is growing in the high three’s despite Trudeau being P.M. Or because Trudeau is P.M. Let your personal politics decide.

    >Yes, money will be more expensive. As for Trudeau, when you borrow billions of dollars and splash them around, yes, you will get “growth”. The question is at what cost. It’s like saying you are richer because you bought a bunch of stuff on your credit card.

    3. Prices are part of a speculative bubble, which will inevitably burst with prices falling like the U.S. property crash.

    >No argument here!

    4. NDP/Green coalition will last long enough to focus on real estate speculation and take real action, causing a chain reaction that pops the bubble.

    >Skeptical, but let’s hope so.

    5. NDP/Green coalition introduce left wing economic policies too much too quickly, causing capital strike and made in B.C. recession that torpedoes the real estate market.

    >Likely.

    6. Other cities become more attractive to foreign investors.

    >This has happened in the U.S.

    7. Trees don’t grow to the sky

    >…and wealth is created through production not swapping houses amongst ourselves.

  3. Keith | 4 June 2017 at 1:10 pm | Reply

    The 3 per day is based on this courier article, assuming the increasing annual trend stays in place.

    http://www.vancourier.com/news/almost-1-000-homes-per-year-slated-for-demolition-in-vancouver-1.2171869

    • El Ninja | 4 June 2017 at 1:21 pm | Reply

      It’s a meaningless statistic. Houses demolished and replaced by new houses = no change to supply.

      • fred | 5 June 2017 at 10:34 am |

        you are just clueless, mr. arm-chair economist. take a walk around broadway/renfew and tell what you see. i hope you are not stupid enough to tell that eight old houses on a block of renfew will be replaced by eight newly built houses. even a child knows there will be a four or five levels condo building coming up once said and done. the block on renfew between broadway and 8th is under contract; you know what it means, dont you? so 8 houses with basements, that is 16 unit of shelters give and take, to be replaced by a building with 40 units of condo = no change in supply, your head is deeply in someone’s arse, not your own arse.

      • El Ninja | 5 June 2017 at 10:49 am |

        You can name a couple streets out of literally thousands where you once saw some houses converted to condos. Good for you.

      • fred | 5 June 2017 at 12:04 pm |

        so i am right, your heard is in someome else’s arse. bad for you.

      • Keith | 5 June 2017 at 1:32 pm |

        Go to Cambie and King edward west. Drive two blocks in any direction. All SFH less than ten years ago. This is a commonplace trend. Walk the streets in East Van. Look at how many places have two addresses on them. How often are you driving along and you see 4, 5, 8 or more houses in a row, same agent words land assembly on each sign. It’s common in this city, east of Granville street.

  4. Keith | 4 June 2017 at 1:45 pm | Reply

    Replaced by duplexes and townhouses in my east van neighborhood. Or a duplex and a carriage house. Or two duplexes and a carriage house. Not often replaced by a house on the east side, which is 100% zoned duplex. Why would a contractor leave money on the table?

    • El Ninja | 4 June 2017 at 1:56 pm | Reply

      So you saw a few houses in your neighborhood turned into duplexes, and assume this occurs everywhere? It is bold of you to assert, without providing data, that demolitions are reducing the overall SFH stock. And if demand for SFHs is as strong as you imply, why would such conversions occur at all? It’s a self-defeating argument.

      • Keith | 7 June 2017 at 4:52 pm |

        One realtor. So many land assembly deals for sale she lists them by neighborhood. Not a few houses. Hundreds in Vancouver.

      • El Ninja | 7 June 2017 at 5:19 pm |

        Occurring along select corridors, barely making a dent in SFH stock, and compensated for by housing developments in Fraser Valley and elsewhere. Contrary to what bulls would have you believe, there is not a wall around the city. People can and do move out. Immigrants can and do choose to live outside the city proper. Sorry, still not convinced that housing prices are going to the moon because of this.

      • brian | 7 June 2017 at 5:31 pm |

        Dude, you been to the fraser valley lately? You do realize that Vancouver doesn’t have a highway that goes through the city right? So the distance from the valley to Vancouver isn’t negligible. There is a reason why the millionaire immigrants are only settled in Vancouver Burnaby Richmond and West Van, and not in Surrey. The fact that you think somehow replacing a detached home in Vancouver with one in Surrey solves the supply crunch of detached is delusional.

        I know from experience, I used to live in Coquitlam and I moved to Vancouver for a good reason, the commute is insane, I hated it. And I was in Coquitlam which isn’t even the worst of the burbs, from Surrey or Langley you have to cross a bridge to get to Coquitlam.

        Your argument is like saying we could replace detached homes in Manhattan (if there is any) with ones from Queens. Sorry, but even in a city like New York with such an advanced transit system that isn’t really equivalent.

        Vancouver’s transit system is terrible. And our highway regularly gets stuck just like any other major city. Getting from Vancouver to Richmond in Rush hour is an issue, forget about Surrey.

  5. Keith | 4 June 2017 at 2:51 pm | Reply

    I surf the MLS listings weekly, very few brand new homes for sale on the east side. Plus driving around, very few brand new single family homes under construction. Lots for sale saying land assembly. Haven’t seen the words “will build to suit” for years. Haven’t seen any large land assemblies with brand new single family neighborhoods being built anywhere in Vancouver. I do see frequent listings for brand new half duplexes.

    Greenfield development in Vancouver finished in the seventies, presumably in Champlain Heights. Brownfield development is rapidly running out of space, so it’s safe to assume brand new half duplexes and some town homes used to be single family homes. The vast majority of homes being torn down are to take advantage of up zoning, you can get over million for a townhouse and half duplexes at the top end are pushing two million.

    Demand for SFH’s is huge, but most people can’t afford them even with a basement suite. The dirt for a standard 33 x 120 lot in an average east van neighborhood goes for 1.4 million, plus whatever you pay for the existing structure – a Vancouver special from the seventies in decent condition would run at least 100k more.

    • El Ninja | 4 June 2017 at 3:28 pm | Reply

      Again, if SFHs are so coveted, there would be no basis for these conversions and hence no change to stock.

      • space889 | 5 June 2017 at 9:54 am |

        Really? You mean as a developer, instead of making $1M building 2 new duplex and selling them, I should be satisfied making $750K selling a new house? Seriously?

        SFH being coveted doesn’t mean the person doing the coveting can afford it, nor does it mean it has the biggest profits.

  6. Elliottwave | 4 June 2017 at 4:33 pm | Reply

    That looks like a Wave 2 wave corrective rally up which shows a wave 3 drop to follow in this C wave down.

  7. BlaMmO | 5 June 2017 at 9:02 am | Reply

    YVR vs BTC. Decision, decisions…

    • space889 | 5 June 2017 at 9:55 am | Reply

      If you like gamble and end up with potentially nothing -> BTC

      I seriously don’t get the appeal of BTC. It actually has absolutely none of its biggest appeals that are touted by its proponents.

    • white_angelos_nubile_equity | 5 June 2017 at 1:42 pm | Reply

      better … yvr-backed btc copycat

  8. brian | 5 June 2017 at 9:55 am | Reply

    @Keith: Wow, you are kind of detailed to be honest. I guess you follow your area really closely.

    @Ninja, seriously???? You have no idea why detached supply is dropping? How about the concept of fsr. Detached in vancouver can have a max of 0.7 fsr in about 99.9 percent of cases. It means, if you have a 4K lot of land, the most you can build is 2800 sq ft give and take a few and a laneway home. Multiplexes can carry fsr of up to 1.0, even better… stacked townhomes can carry to 2.0 and med density can carry to 4.0. So… what it means is that you would NEVER, I don’t care how hot the single detached home market is, build a detached on a lot when you can get much better fsr building something else. Not to mention that city may or may not allow it given that they have already rezoned the lot. Detached supply is absolutely dropping as a result. Cambie is all converted to med density, oak is med low density, granville is converted to same. On the east side, earles is now med to low, 33rd, slocan are all townhomes, grandview woodlands is getting upzoned. Take a look at the community plans for Marpole, Grandview, Kingsway, they all center around upzoning existing land. Keith is absolutely correct in that there will be much more detached torn down and attached built. It’s simple economics, detached is a terrible usage of land. Why would I build less when I can house more people on the same piece of land? And if you have no idea what I am talking about, please stop commenting on vancouver housing.

    • El Ninja | 5 June 2017 at 11:14 am | Reply

      “Wow, you are kind of detailed to be honest. I guess you follow your area really closely.”

      Looks like Brownnose Brian found a new butt to sniff. How about you read the article that Keith cited as “evidence” for his claim? It states nothing about conversions; in fact, it makes the argument that applications have fallen in certain neighborhoods because there are benefits to preserving the original house re: laneways, etc.

      • brian | 5 June 2017 at 11:38 am |

        Do you even know what fsr stands for? If you don’t, please stop commenting on vancouver real estate, it shows you know nothing about it.

      • El Ninja | 5 June 2017 at 11:46 am |

        Another attempt to shut down debate. In this case, if you don’t know all the right technical jargon, your opinion is invalid. Before that it was “don’t argue with a CFA”. Pathetic.

        #BrianTheBully
        #NotScared

      • brian | 5 June 2017 at 1:44 pm |

        Btw, do you know what fsr stands for? That is not a technical jargon dude. It’s pretty common knowledge for most people who have any understanding of real estate or even basic understanding.

  9. space889 | 5 June 2017 at 9:57 am | Reply

    @Brian – I guess @Ninja never took any basic economics or business courses either. I don’t bother trying to educate him anymore..

  10. Burnabonian | 5 June 2017 at 10:29 am | Reply

    Recall that assessments last summer were high enough to scare the shit out of the *Liberals* — aka The Developer Party (TM).

    Now prices are somehow tracking to be even higher *this* summer — exactly when David Eby et. al just became the government. Think about that.

    The higher that assessments are on August 1, the harder our new Marxist Worker’s Party are going to pull on the levers to try to right this apparent wrong.

    I’ll bet three leaky condos and a presale that the legislation to defund this bubble is already drafted and making the rounds for high level review as of this morning.

    The thing about that is that the levers they are pulling on are crude instruments at best. Do you boost the FBT by 5 points, 10, or 15? Do you fuck with the capital gains exemption or don’t you?

    Somewhere in there is the trigger for the negative contagion, and nobody knows exactly what it is.

    Maybe just the formation of a hippie government that isn’t in the pockets of the developers was enough to remind those who are paying attention that the music must eventually stop.

    Maybe the fact that our Premier Apparent and his generals are rabidly hunting any person or corporation who has done well on any side of the business, based only on the left-wing falsehood that “Wealth Is A Zero-Sum Equation” (C).

    For all we know, the recent spike in sales is due to savvy people getting the F out.

    Sophisticated investors upgrading their holdings, or Rats leaving the Titanic? Could be either.

  11. El Ninja | 5 June 2017 at 11:26 am | Reply

    Apparently our educational system has failed Space-Case and Lyin’ Brian.

    You can’t claim that demand for SFHs is high while simultaneously claiming that they will be demolished. One claim contradicts the other. If the former were highly demanded, it wouldn’t be converted in the first place.

    #HappyToHelp

    • brian | 5 June 2017 at 11:40 am | Reply

      So if you can build say 8000 sq ft on a 4000 sq ft lot in condos, you would rather build a 2800 sq ft house instead? Seriously, I dont’ care how hot houses are, it’s simple economics to build a higher density product on the same piece of land. You make more money based on how much you build. Why do you think they don’t build houses in shanghai or beijing, cause we all know the chinese hate detached homes right? That’s why west side detached is all bought by chinese.

      #Ninjafailsecon101

  12. Keith | 5 June 2017 at 11:46 am | Reply

    Why a house is preferred way to live, in two words:

    Strata council

    • Keith | 5 June 2017 at 11:51 am | Reply

      @Brian – despite following the savings/investment practices espoused by the wealthy barber, a high proportion of my net worth is in my house at this time. So I watch the housing market and the financial markets very closely. There’s quite a bit at stake, especially for a wage slave like myself.

      • brian | 5 June 2017 at 12:05 pm |

        I am in a similar boat. I watch both too as my housing wealth is more than my financial wealth I would say. The metric I use is if the debt I owe on the house is less than how much liquid financial assets outside of rrsp I have then I am ok because at any moment I can cash out of the financial assets and wipe out that mortgage. I think there are a lot of people in our boat.

        Strata councils, haha, funny cause I am on one for a property owned by my parents in law. I used to hate the council but after being on one I kind of understand why they have to be this way.

  13. brian | 5 June 2017 at 11:48 am | Reply

    Btw, it still blows my mind that Ninja is debating on why sfh is decreasing in supply. Notice no other bears are stepping up to support your argument. Because anyone who actually knows the zoning bylaws in this city knows what I am talking about. Why would you bother building a detached when you can build so much more in attached? It’s simply economics. Hell, even if you don’t know zoning bylaw, just look around you and you know what I am talking about. The fact that you don’t have a basic understanding of how land is zoned in this city yet still speaks about the real estate market blows my mind.

    • El Ninja | 5 June 2017 at 11:59 am | Reply

      Hi everyone, I’m Brian!

      I don’t understand the concept of a circular argument. Ninja has kindly tried to explain, but I’m still not getting it. Can somebody help? Or should I go back to high school?

      Now, if you’ll excuse me, I have to go ask mommy for another loan. Intergenerational debt is what holds my family together.

      • brian | 5 June 2017 at 12:07 pm |

        Better than El “failure in econ” Ninja, my family is at least together. Tell me, can you say the same about yours?

      • fred | 5 June 2017 at 12:10 pm |

        so moving from rental to rental is what keep el ninja’s family apart?

      • El Ninja | 5 June 2017 at 12:13 pm |

        Imagine being such a failure that your family’s unity depended on a mortgage instead of love and devotion.

        #Sad

      • brian | 5 June 2017 at 12:27 pm |

        Spoken from someone whose family is not together anymore. Enough said.
        #evensadder

      • El Ninja | 5 June 2017 at 12:38 pm |

        Yes, death has a way of doing that.

      • brian | 5 June 2017 at 12:56 pm |

        Right.. so I love how you look down on many of my friends who keep their families together and pay a mortgage together. Cause like you said, you never know when you might be apart. Such arrogance dude, you must be worth millions.
        #FakeSEMIRetirement

    • brian | 5 June 2017 at 12:53 pm | Reply

      You still haven’t addressed my original question. Why would you build a 2800 sq house when you can build a 8000 sq ft condo. It’s like saying I can build trump tower in manhattan but I am going to build a detached home of 3000 sq ft instead. It doesn’t matter how hot the detached market is it doesn’t make economic sense. It’s simple utilization of land. A unit of detached is far more desirable than an unit of condo but when that unit of detached can be turned into 10 units of condo then the equation is different. Again, give me an argument otherwise.

  14. space889 | 5 June 2017 at 2:49 pm | Reply

    Didn’t City of Vancouver has a report that said SFH supply has been reduced by several thousand in the last decade and is being reduced by a few hundred a year, even after accounting for replacement SFH builds?

    I would think that the city data would be pretty accurate since you have to file a permit to demolish a house, and also to build a new house.

    btw, buyers may covet SFH, but they aren’t the ones buying up land and redeveloping it. It’s the builders and builders covet profits enough more. Off course, if you are Chip Wilson then you can afford to buy 4 prime view properties, combined into 2 lots, and then build 2 monster houses on the new lots. Most buyers aren’t got that kind of cash, patience, or know-how.

  15. El Ninja | 6 June 2017 at 12:34 pm | Reply

    Opportunity cost. A concept that is totally lost on most RE owners, aspiring owners, and, needless to say, the bull-tards who frequent this site.

    http://affordanything.com/2015/11/24/is-renting-better-than-buying-should-i-rent-or-buy/

    Now watch as confusion, deflection, and denial unfold in the comments…

    #IntroductoryFinance

    • fred | 6 June 2017 at 12:42 pm | Reply

      wow, took you the whole day to come up with that term to respond to Brain.
      #renter4ever
      #landless4ever
      #armchaireconomist

      • El Ninja | 6 June 2017 at 12:57 pm |

        Imagine being so intellectually outmatched by someone that the best defence you can come up with is to time how long it took them to reply to someone else’s post.

    • Brian | 6 June 2017 at 1:24 pm | Reply

      I don’t actually dispute what you put on there. I am not sure why you think anyone here think that owning a property is an investment. None of the bulls have said that it is an investment. I recognize the cost and that a prudent renter could return just as much if not more with the appropriate leverage. If you look at most bulls here, we all have other financial assets to balance out our real estate holdings.

      However, you are assuming money is the only consideration. For most bulls it is not, not even close. How do you put a price tag on having full control of your own home? You can’t put a price on that luxury. If truly the adage goes that “home is where the heart is”, then the house that contains that home better be sonmething that NO ONE else can control but myself. That is why we own.

      The issue we have is that you keep on stating that there will be a crash in the detached segment of the market when looking deeper into the data (below the skin deep price to rent / price to own ratios that you keep on bringing up) we just don’t think it is true. Also, to most bulls, if you are settled in Vancouver like I am, and you value having control of your place as much as we do, then not owning is the same as shorting the market. It is a given that I will eventually own, just a matter of when that is.

      The other issue in Vancouver is that it is very difficult to find long term detached rentals. Usually stability comes from a market rental which is owned by a commercial company that does only rentals. There is no such thing in the detached market. So any rental is in reality a temporary one until the owner decides to sell. So there is no stability in the detached rental market.

      • El Ninja | 6 June 2017 at 1:54 pm |

        “How do you put a price tag on having full control of your own home? You can’t put a price on that luxury.”

        Oh, but you can. That “luxury” is reflected in a property’s price. So too are the disadvantages of owning (illiquidity, immobility, etc.). That’s the whole point of pricing, to reflect value obtained.

        By saying “you can’t put a price on”, you imply that ANY price is justifiable. Fact is, there is a limit to how much someone will pay for the advantage of having more control over their home.

        And “control”, by the way, is more of an illusion than you think. You can’t control your neighbours. You can’t control changes to zoning. You can’t control unforeseen and potential disastrous issues in your building or neighbourhood. There are a lot of things you can’t control, and are stuck with, as an owner. Things that a renter can say “cheerio” to.

        But I’m not interested in dragging up this debate with you again. For some people, in some markets, at certain times in their lives, owning is preferable. For others, renting is. And these are fluid considerations.

        Just be honest about it.

      • space889 | 6 June 2017 at 2:00 pm |

        Ah that wonderful freedom of being a renter. So you saying you can break your lease if you don’t like your neighbors or there is construction next door half way through? That you can change your rental like buying a new pair of pants in Vancouver? Seems like all the disadvantages you cite for owners happen just as much to renters, and you have to live under more rules too.

      • Brian | 6 June 2017 at 3:08 pm |

        Look dude, you obviously haven’t been living here for twenty years. Try going out there and finding a long term stable single detached home rental in the west side of vancouver and you will see what I mean. The issue here is that for those that desire that lifestyle ownership is really the only option. Yes, you cannot control your neighbours or the zoning but they are less likely to be an issue than getting kicked out in a year or two because your landlord wants to sell.

    • space889 | 6 June 2017 at 1:58 pm | Reply

      Right…that wonderful opportunity cost, where if only people are smart enough to invest properly, they would all be millionaires now.

      Remind me again why so few retail investors actually achieve anything close to market return? Or have high 6 figures / low 7 figures portfolios? I mean 50% of Vancouver residents are renters, surely they understand opportunity costs and basic investing right? Maybe that’s why we have so many super cars in Vancouver because all the renters are all investment gurus with high single digit or double digit investment portfolios?

      btw, ever tried renting with pets or 2 young kids / babies in Vancouver?

      • El Ninja | 6 June 2017 at 2:10 pm |

        That some people don’t understand how to approach the markets is not an argument against the benefits of investing excess capital saved through renting. It is a financial literacy problem that can and should be addressed.

        #NotAnArgument

      • Brian | 6 June 2017 at 3:10 pm |

        Oh Space, it’s a piece of cake. First select dogs ok and cats ok on craigslist, watch your options go down by 90%. Then go to an actual rental open house and literally try to fight your way to the front of the line. Then you better hope the owner likes your breed of dog because one of my friends got rejected because his dog sheds too much (is there such a thing?) It’s real fun with pets.

      • El Ninja | 6 June 2017 at 3:21 pm |

        Bull argument for sustained price increases now down to, “renting with pets is hard”.

        #GraspingAtStraws

      • Brian | 6 June 2017 at 3:32 pm |

        Sorry fluffy, your owner ninja is putting you down because he can’t find a rental with you. Hope you get a better owner next life.

      • El Ninja | 6 June 2017 at 3:52 pm |

        Hilarious! We have a comedian on our hands, folks!

        #DontQuitYourDayJob

    • Keith | 6 June 2017 at 7:44 pm | Reply

      El Ninja, people who have studied personal finance and investing understand the possibility of “renting and investing the difference” to crudely sum up the article that you cited. There is a serious flaw in the key assumption of this article.

      The article posits that the renter invests 100k in a stock market based etf and earns an 8% average annual return. In the real world the average investor has an appalling track record of investment returns. There is a great deal of evidence that supports how the average person gets mediocre returns even when they work with an advisor, due to the all too human tendency to buy high and sell low. The average investor in the Magellan fund, run by wall street legend Peter Lynch with a 29% annual return managed to lose money.

      http://www.innovativewealth.com/wall-street-wisdom/individual-investors-bad-investing/

      So to expect our fictional renter to match the return of the stock market is completely unrealistic, based on the real world behavior of ordinary people and there is a large body of academic work that proves in painful detail how bad people are at investing.

      Most of the “bulls” you mock wanted to buy and eventually own their own home. It gave me comfort to think that if I owned a piece of real estate at the age of 80, and I needed to go into a home, it would finance a few years in a nice place if all else failed investment wise. Theory is nice. Maybe introductory finance doesn’t quite work in the real world with real people.

      • El Ninja | 6 June 2017 at 9:07 pm |

        And no one has ever lost money in real estate? Riiiiight.

        Look, there’s no accounting for some people’s stupidity. Conceptually, though, that’s not an argument against my point.

    • The Auteur | 6 June 2017 at 1:58 pm | Reply

      [CBC] – Vancouver becoming ‘apartheid city’ in housing crisis, says former UN rep

      …”Vancouver is becoming an “apartheid city” in terms of the divide between rich and poor, said Miloon Kothari, the former UN special rapporteur for housing.

      Kothari, who visited Vancouver a decade ago in that role, has returned to give several talks and spent Monday visiting the Downtown Eastside, Balmoral Hotel and the “Ten Year Tent City,” which stood in the same place in 2007.

      “I’m very disturbed to see that not much has changed. In fact, the situation has become worse,” said Kothari.

      He was referring to the steep increase in homelessness in the city and region, alongside “unbridled speculation” of land and property. Kothari said it was “shocking” that welfare rates haven’t changed over the 10 years.
      “It’s sheer neglect,” said Kothari, who lives in New Delhi.”…

      http://www.cbc.ca/news/canada/british-columbia/miloon-kothari-vancouver-housing-1.4146672

  17. Arnie Carnegie | 6 June 2017 at 5:09 pm | Reply

    Why the comparison between speculating in the stock market vs buying a place to live? The old Vancouver Exchange was such a cesspool that it was shut down. If the other global exchanges are so well-regulated, and investors so savvy, why didn’t anyone shut down Madoff? 30 years and billions of dollars and no one called out his bullshit. How is it that uber greedy Buffet keeps waltzing away with billions while others lose and lose and live in basements? Why not make a comparison between opening a business rather than spending on a house. At least that’s hands-on. The stock market is more akin to parasitism, or gambling.

    • El Ninja | 6 June 2017 at 5:23 pm | Reply

      Shares in Warren Buffett’s company, Berkshire Hathaway, have been available to small investors, including yourself, for decades. They have made many, many families very rich. Buffett is the last thing from greedy — lives a relatively simple, austere life. Does his own taxes. Preaches frugality and common sense. Has benefited millions. Unfortunately for you, you haven’t listened.

  18. Arnie Carnegie | 6 June 2017 at 6:10 pm | Reply

    Buffet is sitting on 74.6 billion. That’s not greedy? Seriously? People are brainwashed by parasitic billionaires. These parasitic control freaks only give up what they’d otherwise have to pay in taxes. The other dodge is to set up foundations – anything to keep control of the cash.

    • El Ninja | 6 June 2017 at 6:19 pm | Reply

      You truly are clueless. Buffett has donated or committed to donate 99% of his wealth.

      https://www.insidephilanthropy.com/wall-street-donors/warren-buffett.html

      • Arnie Carnegie | 6 June 2017 at 8:51 pm |

        How charming. When he’s dead, be can’t take it with him. If he could, he would. If he could buy someone’s heart, kidneys, eyeballs – he would. Meanwhile, he is uber greedy. These parasite billionaires are in a competion to be the first trillionaire – though I think that’s spot is already taken by pirate royals. They manufacture purple kool-aid for Jonestown brainwashed boneheads. Some drink it. Some take it intravenously. Some use it for enemas. Clearly, you do it all three ways – with a picture of Warren in front of you and a box of tissue beside.

      • El Ninja | 6 June 2017 at 9:22 pm |

        Failure-at-life Arnie is bitter that some people have (fairly) earned more money than him.

        He could have invested alongside Buffett, or learned some of the many lessons the man has imparted, which are available for free at the library or online.

        Instead he chose not to read, preferring to attack the successful in an effort to make himself feel better about the fact that the pinnacle of his financial success is owning a dump in East Van.

      • fred | 7 June 2017 at 8:18 am |

        if you are so knowledgeable and clue-full as you claim to be, why aren’t you rich? why are you still renting basement?

        The problem with you bears, you cannot stand to see people owning real estate because of your negative and envious nature, it’s just simple as that. It’s not that your bears don’t like Vancouver, it’s because you don’t like seeing people owning and buying real estate in Vancouver. You just want people to be in the same condition as you are. Am i right, or am i right?

        the 2006 bears brought up opportunity cost, this topic died then. now a new bear generation brought it back up. Hilarious! How do those technical analysis, charts, graphs work out for you? or against you?

        Are you also investing with Buffett too? I am sure he yields you a ton of cash, stock under your pillow right?

        it just kills you to doll out rent cheque everymonth, when your friends have their own places. Tragic, real tragic !

        It’s not too late, Chiliwack is still relatively affordable. Don’t wait until next year, or you have to go as far as Hope.

      • El Ninja | 7 June 2017 at 8:31 am |

        Airhead Fred tries his hand at psychoanalysis, conjecture. Fails. Goes back to swatting flies in his trailer.

  19. Arnie Carnegie | 6 June 2017 at 9:56 pm | Reply

    Because I have read thousands of books in diverse fields, I have discernment. My house in Fabulous East Van is in a top 1% location – proximity, topography, orientation. Places like this hardly ever come up for sale. My kids have known this house their whole lives. They have roots. They will never wind up living in a basement poring over stock market reports; wishing their money wasn’t “tied up”. I’ve read a lot on investing. It’s full of parasites and con artists. Real estate is called real for a reason. Sounds to me like you’re one of those weasel insurance agents in the “financial planning” industry. When people buy a house, that takes cash out of the commission pool – big threat.

    • El Ninja | 6 June 2017 at 10:27 pm | Reply

      Words that should never go with “East Van”:

      – “Fabulous”
      – “Top 1%”

      Chile-con-Arnie made a major financial commitment to the armpit of Vancouver — now dedicates himself to self-rationalization and bitter, ill-informed attacks on those who are wiser and more successful. He has an axe to grind. A family who holds him accountable. Kids will forgive a lot. Wives, less.

      As for me, I’m an impartial market observer. Couldn’t care less either way. I no longer live in Vancouver — but it makes for interesting study. A bit like watching zoo animals.

    • Ralph Cramdown | 8 June 2017 at 6:24 am | Reply

      “Real estate is called real for a reason.”

      It certainly is. Your tenancy is at the whim of the King. That is the origin of the term.

  20. Arnie Carnegie | 6 June 2017 at 11:09 pm | Reply

    The world doesn’t agree with grasshopper “ninja”. If this isn’t the BPOE, it’s a reasonable facsimile. If I knew of a better place, I’d move there.
    It’s puzzling why you’re so desperately preoccupied with Vancouver real estate. You are obsessed. Or lonely. And your wildly incoherent angry posts are a simulacrum for a relationship. Must be tough getting someone to come by and share a box of KD in your basement rental.

    • El Ninja | 7 June 2017 at 8:13 am | Reply

      “The world”. Lol.

      It is the height of irony that the man who obsessively-compulsively rants about individual listings and realtor “rats” should call anyone obsessed or incoherent.

      I’m preoccupied with calling out bullsh*t, and it happens to be rampant in Vancouver. And on this blog. Like calling East Van “fabulous”.

      #NiceTry

  21. El Ninja | 7 June 2017 at 8:51 am | Reply

    Life hack for bulls and bears alike: Read Scott Adams. Learn about cognitive dissonance and its power to reconstrue reality in your mind and, at times, even invoke hallucinations. I think there’s some of that going on here…

    • space889 | 7 June 2017 at 9:02 am | Reply

      Yes, there is a lot of that going on here. So after you have read it, please report back on what you have learnt and how you plan on avoiding it in the future.

  22. space889 | 7 June 2017 at 8:58 am | Reply

    Oh how I love reading El Ninja’s posts on investments…it’s so refreshing…and the opportunity cost argument..that’s such an icing on the cake. So how many average retail investors are back to where they were before 2008 crash, after 8 years and counting of bull markets? I doubt very few.

    But hey, let’s not let that little fact / reality get in the way because we can all look in rear view mirror and say, if you had invested in S&P500, FANG stock, etc, you would have made so much money, and that’s your lost opportunity cost! If only we can go back in time and do that. I love how bears accuse bulls of ignoring reality, while totally ignoring the reality of the average investor’s performance – which is simply abysmal even in bull markets, and hold up some theoretical pie in the sky investment returns as opportunity cost. This is kind of bulls saying hey, if you studied hard, be a specialist doctor, and bought a West side house 30 years ago, you wouldn’t have any of the current housing affordability problem. Just because you are only 22 years old right now isn’t an excuse!

    • El Ninja | 7 June 2017 at 9:18 am | Reply

      Saying that investing in a diversified portfolio is inadvisable just because some people lack discipline is like saying that eating healthily is inadvisable because some people are unable to control their junk food cravings.

      #BullLogic
      #Confused

      • space889 | 7 June 2017 at 3:08 pm |

        Right, only some people can’t invest properly…vast majority of individuals are all good investors, tracking closely with a general diversified market index return. I’m sure a lot of academics, experts, and fund managers would love to see your data proving that. Actually, I’m sure almost all self directed trading brokerage companies would pay good $$ for that data because it would really help their advertising and get people to trade on their platform than putting money into index / mutual funds.

      • El Ninja | 7 June 2017 at 3:48 pm |

        #NotAnArgument

    • Ralph Cramdown | 8 June 2017 at 6:35 am | Reply

      “So how many average retail investors are back to where they were before 2008 crash, after 8 years and counting of bull markets?”

      Back to where I was before 2008? You’re kidding, right? I guess if I was retired (i.e. not still saving) and I was in 100% equities and I wasn’t a very good investor, I might still be below a 2008 high water mark (but how many people does that describe?). As it is, family net worth is 5x-10x what it was then (can’t be bothered to check). Spending less than you earn and regularly investing the difference into a bull market will do that.

      • space889 | 8 June 2017 at 8:51 am |

        1 – So is your new net worth high mark a result of new money you put in, or investment returns from your existing portfolio prior to the crash? If I had a $1M portfolio that went down to $500K after 08 and then I put in another $5M, off course I can claim I’m way past my high watermark before 08 as well. But that’s not because of my investment prowess, it’s because I put in another $5M!

        2 – So you made out better than 08, does that automatically mean every other or even most (68%) retail investors are in the same boat as you?

      • Ralph Cramdown | 9 June 2017 at 12:57 pm |

        1. Both. But isn’t this how most people still in the accumulation phase of their lives would do it?
        2. I assume most other investors did well, too. If you put a lump sum onto an S&P 500 index fund at the top in 2007, and did nothing but reinvest the dividends between then and now, you’d be up about 100%, minus a bit for the taxes you’d have paid on the dividends.

  23. space889 | 7 June 2017 at 9:01 am | Reply

    Btw, can someone explain to me how being a renter means you can select your neighbors? Prevent construction next door? Do any kind of renovation you feel like? Host a party without worrying about complaints? Move around whenever you feel like, even when there is still 6 months left on the lease? Or control zoning changes? Or prevent disaster like a burst pipe in your building? How does a renter get all that magic power?

    • El Ninja | 7 June 2017 at 9:11 am | Reply

      Because moving out as a renter is just as hard as it is for an owner. Bending reality to fit your narrative.

      • fred | 7 June 2017 at 9:57 am |

        come on man, let be concerned no more. buy a rv, stick the license plate on and you set for life at trout lake. you can be all you can be, except an arm chair economist with your “opportunity cost”.

      • space889 | 7 June 2017 at 3:09 pm |

        Oh I forgot, there is no consequences to breaking a lease and a good rental at an affordable price is always just around the corner waiting for you.

      • El Ninja | 7 June 2017 at 3:31 pm |

        Man-child Space thinks breaking a lease (or sticking it out a few months) is hard. Finding somewhere else to live is hard. Everything is hard. So very, very hard. Runs to Mommy Brian for a cry-cry.

      • space889 | 8 June 2017 at 8:53 am |

        Apparently owners can’t sell in a few months and must suffer through all the problems with a stiff upper lip and hopes it goes away after a few years…

      • El Ninja | 8 June 2017 at 9:05 am |

        No, they can move. Sometimes in a matter of weeks, other times in months or years. But they won’t be able to hide from buyers the problems that arose in their neighborhood or house, and they’ll pay for them in the form of a lower sale price.

  24. brian | 7 June 2017 at 10:11 am | Reply

    I am seriously a bit tired of all this narrative of owning versus renting. Both has good and bad, depends on your choice, and guess what else? It also depends on your culture. How else do you explain that Berlin has a drastically different price to rent than say a place like Beijing. Ninja is actually right that you could put a price on the premium of ownership. That price is based on culture and what the culture places on the priority of ownership. Surely you can’t expect a city made up of 100% Germans to have the same ratio as a city made up of 100% Chinese. The demographics of the city and how it shifts will dictate which market the city will resemble more. I don’t think I need to remind anyone which demographic this city is shifting to. Just look up wikipedia and demographic projections. So question is, are we going to have a price to rent ratio closer to say Berlin or London or one that is closer to Shanghai and Beijing. You be the judge.

  25. El Ninja | 7 June 2017 at 3:51 pm | Reply

    The enemies of reason on this blog have been frothing at the mouth more than usual the past couple of days. Haters gonna hate!

    #NinjaIsBeneficent
    #NinjaIsForgiving

    • brian | 7 June 2017 at 3:56 pm | Reply

      This was.. just.. weird.. But sure, whatever floats the boat for you buddy. Fellas, we need to take it easy on him… I thinks someone is losing it.. bad….
      #Someoneisgoingcoocoo

      • Fred | 7 June 2017 at 6:15 pm |

        this guy is going banana after announcing his “opportunity cost”. come to trout lake, look at the dogs running around the park, it might help you. relax, living in basement is not that bad, as long as you don’t drag yourself down, and don’t compare yourself to your peers. have a nice evening, #opportunitycostkid.

  26. white_angelos_nubile_equity | 7 June 2017 at 4:19 pm | Reply

    maybe this thread is unstoppable … #groundhogday … in the other hemisphere

  27. Arnie Carnegie | 7 June 2017 at 6:45 pm | Reply

    1267 Windermere: I’ve read a lot on architecture, written by its practitioners and criticism, so I was piqued when I saw that this ppty was designed by award winning architect Imu Chan. A google search came up with no awards, but did find some of the most egregious obfuscatory mumbo jumbo architectspeak I’ve ever seen. If anyone can elucidate what awards this architect won, please post. In the meanwhile, it looks like an overpriced p.o.s. in a no name location. Happy to be corrected.

  28. Arnie Carnegie | 7 June 2017 at 6:55 pm | Reply

    5597 Bruce St: here’s a sinkhole for $2.388M + GST. An awful west facing money pit built by people who have never cooked in their lives. Ad says that lots of money was spent on light fixtures. That’s exciting. A no name location with no upside – always liked the name of the street though.

  29. Arnie Carnegie | 7 June 2017 at 7:04 pm | Reply

    3621 Turner St: splish splash I was taking a bath – bought May 2016 for $2.675M – listed at $2.380M. It’s still way too much for this custom caca in a crap location. With closing costs and rodent fees, someone is flushing $350K.

  30. Arnie Carnegie | 8 June 2017 at 11:45 am | Reply

    1267 Windermere – Since the r.e. rodent’s first line in his ad (in all caps) is that this house was designed by an award winning architect, I’ve tried to find some confirmation of this statement – to no avail. Nada, zilch, zip. Architect Imu Chan’s writing on architecture is sensitive, poetic, philosophical rubbish. And, as the inimitable Marge Simpson asserted: We can’t afford a store with a philosophy.
    The Windermere house appears to be the only house he has ever designed – and it’s a stinker. Maybe he got an award in high school for something, or later for a model; but for a house? That was actually built? I can find no evidence. Rodent’s ad has more of the poetic rot – likening the exterior to a tuxedo. A house exterior as a tuxedo. That’s rich.
    For a licensed architect designing a house like this for ordinary money on an ordinary lot like this is like using a sledge to pound tacks.

  31. Arnie Carnegie | 8 June 2017 at 12:06 pm | Reply

    919 27th Ave E: bought just over 9 months ago for $1.55M – a Van Spec Dreck reno rodded staged and listed for $2.298M. Rodent asserts that this is the best street in Fraser Village – a statement that has no basis in fact – and since when is this area a village. That’s just silly. The nearest grocery store is No Frills. That tells you a lot about the area. Skytrain? No. Detatched garage? Don’t be ridiculous. Scruffy animal skins and glass table for staging? Check. Fridge and stove touching? Bad but true.

  32. Arnie Carnegie | 8 June 2017 at 1:12 pm | Reply

    139 Alexander: strata unit bought 10 years ago for $785K – last assessed at $1.32M – listed at $2.586M. Yowza.

  33. Arnie Carnegie | 9 June 2017 at 7:47 am | Reply

    576 30th Ave E: used to be one big lot below the graveyard – then it was divided into two 25 footers with two skinny shitboxes. First buyer paid $1.23M six years ago and sold it three years later for $1.95M. That was smart. Three years on and it’s listed at $2.179M. That’s hopeful for this ugh location near Fraser St, the funeral home, and No Frills. Desirability factor – snake belly low.

  34. Arnie Carnegie | 9 June 2017 at 8:17 am | Reply

    3838 Ontario St.: an awful monstrosity. No lane. Last assessed at $3.849M – listed at $4.98M – a ludicrous ask. Interesting that the scraper was bought in 2011 for $2.06M and resold in 2014 for $1.638M. Loser.

  35. Arnie Carnegie | 9 June 2017 at 9:34 am | Reply

    3107 21st Ave E: most moronic rodent blurb – matches her face. Who gave her this, her only listing?

    • The Auteur | 9 June 2017 at 11:51 am | Reply

      [CBC] – Free no more: City of Vancouver to charge for 2-hour parking spots in West End

      …”Lon LaClaire, Director of Transportation for the city of Vancouver, said paying to park is actually a good thing for drivers, because it’s going to free up parking spaces…

      …He said the city is also looking to charge for what is now free parking in the Olympic Village and on Great Northern Way near Emily Carr University.”…

      http://www.cbc.ca/news/canada/british-columbia/no-more-free-parking-west-end-1.4153115#commentwrapper

      • vreaa | 11 June 2017 at 5:57 am |

        “paying to park is actually a good thing for drivers, because it’s going to free up parking spaces”

        ROTFLMAO
        you really can’t make this up
        great find; thanks

      • El Ninja | 11 June 2017 at 8:25 am |

        “paying to park is actually a good thing for drivers, because it’s going to free up parking spaces”

        One can’t really disagree with this. Raise the price the of something, you reduce the quantity demanded. Public roads amount to a subsidy from non-drivers to drivers. The result is more congestion than would exist under a direct user-pay system. A good example is private toll roads — typically free and clear compared to the adjacent public alternative.

  37. Arnie Carnegie | 11 June 2017 at 9:33 am | Reply

    Vreaa – you might want to read ‘the High Cost of Free Parking’, by UCLA urban planning research professor Donald Shoup. West End street parking for residents should be at least $200./mo. The quiet street we live on is absolutely littered with parked cars – because it’s free – while garages are receptacles for all manner of storage. We live 5 mins walk from Skytrain. It’s ludicrous that people here have cars at all. D/T should have entry fees and punishing parking rates. The hegemony of motordom must be pushed back. We have been oppressed, assaulted, and murdered by the vehicular industry for over a hundred years. Look up how General Motors maggot president Alfred Sloan bought up street car companies and destroyed them in order to sell more cars.

    • vreaa | 11 June 2017 at 11:35 am | Reply

      OK, so maybe I laughed prematurely… yes, the behavioural economics of ‘free’ parking must be more complicated.
      Notice, however, that the article is talking about metering zones that are currently allow ‘2 hour parking’… those who park are already limited and policed and transgressors ticketed.. nobody is allowed to leave vehicles there indefinitely (as they are on Arnie’s street). All that this change will really do is increase revenue from those streets, rather than truly make more parking available. And, as we know, it is hard to argue with increased revenue.

      Using the same principles, how about introducing costs for use of public areas that some may deem are getting ‘too busy’ — Why not charge to use the seawall? Or sit on the beaches?

  38. Arnie Carnegie | 11 June 2017 at 1:13 pm | Reply

    … or a window tax. That’s just silly. Cairo is one of the only cities in the world to charge a nominal fee for use of their Al-Azhar Park – even so, it is often crowded. I think this is a terrible discrimination against children and poor people but, as one of the world’s densest cities, without the fee, it would be choked. London charges those who use parks for business purposes like dog walkers and fitness trainers. This makes sense, though I’d prefer all commercial activities kept out. A park is like a temple, or a church – which don’t even pay property taxes. That the boys club Vatican cabal – these weird men in funny hats, flowing robes, and jewelry, own choice property around the world; who suck funds from the gullible, get away with not paying taxes, is a travesty.

  39. El Ninja | 11 June 2017 at 1:59 pm | Reply

    There are uniquely pernicious externalities associated with vehicles re: pollution, traffic jams, accessibility, etc. so this is an especially suitable target for more efficient pricing.

    But as for the seawall, beaches, etc… why not charge? Why should a taxpayer who lives inland be forced to subsidize the lucky coast-dwellers who enjoy these spaces? Or, for that matter, the coast-dwelling taxpayer who is disabled and hence unable to navigate the beach? Nothing is free. It costs money to maintain these places. Who pays, is the questions.

    I would rather pay lower taxes and then allocate the savings to only those goods and services that I consume. It’s fairer, for one thing. And for another, you avoid distortions (in this case, in the form of excessive crowds).

    Again, if it’s unfair to charge the poor, how is it any fairer to take money from another poor person who isn’t able to enjoy these places? Besides, families or individuals of lower means could be granted a pass, just as many private universities in the U.S. discount or waive tuition for low-income applicants. It’s not a perfect solution; there would be some degree of cheating, but overall it’s not complicated and would represent a fairer distribution of cost / benefit.

    On a conceptual level, user-pay cannot by ethically argued against.

    The all-important caveat is that any charges for access to these spaces would need to be offset by tax reductions. This is perhaps unlikely, knowing governments, but if planned correctly could be enforceable.

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