“Always the Right Time to Buy!” – Cheap Rope For Vancouver RE Buyers

As a mortgage agent, Lorina Serafico, a home-financing adviser with Scotiabank, often gets asked when is a good time to buy a home.
“If a household has the income, down payment, and the credit score to qualify for a mortgage, it is always the right time,” she said.
According to Serafico everyone needs a home, whether owned or rented.
“I consider mortgage payments as a forced savings plan,” Serafico said. “A $500,000 property you bought today will be worth $873,000 in 10 years. That’s an average of 7.45 percent annual increase, beating a medium-risk investment portfolio.” …
With more than a decade as a mortgage agent, Serafico has served numerous customers, and a number of them have started meeting with her again.
They’re usually owners of townhouses and condos, and now they’re thinking of upgrading to single-family homes.
“They like what is happening in the market. There’s more inventory; prices have stabilized; and interest rates are good,” Serafico told the Georgia Straight in a phone interview.
On March 27 this year, the Bank of Canada slashed its key interest rate—which determines bank lending rates—to its lowest level of 0.25 percent.
– excerpt from ‘Mortgage holders can seize on opportunities to upgrade’, Carlito Pablo, Georgia Straight Vancouver’s News & Entertainment Weekly, 17 June 2020

“It’s hard to make predictions, especially about the future.” – attributed to Yogi Berra.
One would think that people, especially finance professionals, had learned not to say things like “…it will be worth…”, “…7.45%…”, and “…always…”.
– vreaa

35 responses to ““Always the Right Time to Buy!” – Cheap Rope For Vancouver RE Buyers

  1. In case it gets moderated, post the link yourself… =b

    https:// twitter.com/ewsiddall/status/1273652213324435460

    Evan Siddall

    House prices lag economic events. Current price resilience proves nothing: don’t take comfort from low volume price action. Multiple offers are consistent with a huge decline in new listings. Government support programs have deferred (& reduced) an inevitable economic adjustment.

    From the head of the CHMC… of course he’s also leaving at the end of this term (year?), so maybe he doesn’t have anything more to protect.

  2. The bubble has generated housing-related employment for otherwise unqualified individuals.

  3. Raging Ranter

    “A $500,000 property you bought today will be worth $873,000 in 10 years. That’s an average of 7.45 percent annual increase, beating a medium-risk investment portfolio.” …

    To her credit, she is rounding. She said $873,000, meaning she is conservative enough that she refuses to offer up a prediction of the home’s value to the exact dollar, nor even to the nearest $100. I can appreciate that rare combination of caution and clairvoyance.

  4. You can never guarantee returns in excess of guaranteed rates. 5-year GIC’s are currently offering around 2%. If used house sellers and “mortgage professionals” were held to the same reporting standards as the greater financial industry, many would be in jail. Bernie Madoff’s consistent returns of 10% per year, we all know what happened there.

  5. LOL they would also be in jail for not disclosing their holdings and conflicts.

    “Buy this stock; it’s guaranteed to go up ™!!!” said the lady who had personally invested millions into the same stock, but didn’t happen to mention it. And whose job and career were tied to the success of that stock. And whose friends, family, work associates, and banker were holders of the stock.

    Never mind the fact that the employees of the media outlet *reporting* the blatant pumping as “news” are all long the same stock, (for millions of dollars,) and their financial futures were entirely dependent on strangers continuing to overspend on that stock.

    No, nothing fishy there.

    In no way does this remind me of the ladies who try to sell my wife ugly leggings on Facebook.

    Soap with a prize inside!

  6. Are there any stats related to mortgage deferrals? % of mortgage deferred? % can’t pay vs won’t pay?

  7. This is a big slow motion wreck. We really won’t know until the middle of 2021 how serious things are going to get or even how many people will outright default. By then the CERB payments and the ability to defer will be 6 months in the rear view mirror and reality will be setting in. But even then you can buy yourself another 6 months time before the bank pushes you out and takes your place. Maybe longer if there is a fight. That gets us to 2022. And the whole time we will be hearing realtor’s saying its a good time to buy. LOL. Because its always a good time to be a buyer. Even when the housing correction comes so glacially slow its the equivalent of a frog getting boiled and never hopping out of the pot. And that’s why so few sell at the top. Because almost nobody is able to see into the future or read the obvious signs along the way. I was listening to David Rosenberg the other day and he was quite blunt. This is a depression he said. By every metric. There is just no way to sugar coat the truth. And yet Toronto housing prices actually went up after the lock downs got lifted.

    Hormones! Sheesh.

  8. Needs complete cosmetics. Vancouver special, east of Main. Thirty offers, including one mentioned on Facebook at 2 million which was not accepted. Not the right time to buy, yet.


  9. Thanks for the updates, people.
    As you can see, we are sittin’ back and watchin’ the river flow…
    Will post again when something really noteworthy knocks on the door.
    Keep well; enjoy the sun.

    • Might the all out brawl that has erupted between CMHC head Evan Siddall and the entire real estate industrial complex be worthy of a post?

      They have been attacking this guy trying to shut him up, and rather than be intimidated, he’s taken the gloves off.

      • Wow
        This is indeed significant. He seems to really be striking right to the heart of the matter; very unusual for somebody in his position. Gutsy and admirable. Surely the group (the organization; the vested interests he is criticizing) will have him replaced?

      • @vreaa, I believe Evan Siddall has “stepped down” from being the CEO of the CMHC effective Dec. 31, 2020 (possibly earlier if a replacement is found sooner). He announced this in January. I’ll post a link next, but in a separate post (due to always getting into moderation with a link… =b).

      • Lurker – > Interesting
        Perhaps being moved aside…?
        There are expectations of even more liquidity in 2021, and one wouldn’t want a naysayer/facts to get in the way of blowing the bubble out to galactic proportions.

  10. There is a possibility, dear colleagues, that I had not fully considered: hyperinflation that outpaces income growth, keeping housing relatively unaffordable even as prices fall in real terms. With the amount of liquidity coming into the system, this seems like a distinct possibility.

    • The root of the homeless problem is mental illness and addiction. They need support in these areas more than anything. Housing will just attract more of them. Those who can work should be offered the opportunity. Some should be relocated.

  11. Just heard this from a Chinese women who is a new immigrant to Canada and had to pass it on. She rents in my building. So we were talking and she said she had wanted to buy a house in Toronto. But her real estate agent (who is also from China) told her it was not a good idea. The reason is that if China and the US have a war over Taiwan that Canada will be on the US side and Chinese won’t be welcome here for awhile. Flights between our nations could even be closed to Chinese altogether. So that means that Toronto housing will fall and she said it will be because Chinese people are already selling their houses over this worry. Then she added that her husband who is in the Government has told her with high confidence that Taiwan can be taken in 3 days and preparations are already being made. Like a Blitzkreig.

    You heard it here first.

    • Now this is the on-the-ground intel I come here for. Thanks, Bishoftu.

      The prospect of war with China should scare us all sh*tless. If it comes to pass we will have much more to worry about than real estate!

      • Xi Jinping tells his elite troops t0 “prepare for war” as destroyer USS Barry sails through the Taiwan Straits. That was the headline on Zerohedge about an hour back. Hmmmm. Well news like that certainly makes the prospect of war with China seem more likely. Even imminent.

        So I should tell you the rest of the story as I heard it since it is beginning to look like my neighbor does indeed have good information. What she also said was that it all depends on who wins the US election. So we will not have long to wait to see if a war breaks out.

        The reason is that the Chinese leadership is not going to sit by and wait while a new Trump administration fortifies Taiwan with all the weapons systems that are being proposed for sale. So they would act quickly. Possibly as soon as the vote is tallied.

        This is really going to send the world into convulsions if it comes to pass. I have already made plans to stock up on a few medications I know are Chinese made. A war means that bilateral trade between China and North America will not just be slow, it could come to a sudden and complete standstill. That means aything that you might need that only comes from there will spike in price overnight. Many products will go into absolute scarcity.

        The US dollar could soar on the news as flight to safety kicks in (even if that makes no sense since the US will certainly lose any war that happens in that theatre). Tourism that is already dead will deflate even further. Airlines, hotels, resorts, cruise lines etc will all sell off hard on the markets. They were in trouble before but an actual war with China will finish many of them off for good.

        Stock markets will crash. You can guess the rest. None of it is any good. Years could pass before life goes back to normal again. I would not want to be stuck holding a mortgage right now if my life depended on it.

      • I am going to slip in one last remark since the prospect of a US/China war is obviously very serious. We should all be prepared for the internet to go down. In this age, a modern war will come to us electronically and digitally. We may not even be communicating online in a few weeks time unless we have already prepared. This is probably a good time to download a copy of Tor Browser or other deep web search engine and also to be set up with proxies and peer to peer networking. There are workarounds when the internet goes down. But only if you prepared in advance. And none of that is intended to cause worry but I think we need to be realistic. Coronavirus is not the thing that should be top of our concern list anymore. The Black Swan event nobody is ready for is the day the world wide web actually goes dark and the stock makets (and financial hubs) get blinkered. There will be no trading on the Dow or TSX in a real war scenario. And clearly, the achilles heel of the West is our deep reliance on electronic, communications and financial systems.

        If the lights go off we are so screwed it isn’t even funny anymore.

      • thanks, bishoftu. always good to prepare.

        and i’m betting trump will will a second term…

  12. vancouvercondo.info owner spooked and site gone for good, or just frozen?

  13. China Pushing Things To “Boiling Point”:
    Administration Says Pentagon Alarmed Over Taiwan

    Jim Sciutto, CNN’s Chief National Security Correspondant wrote:
    “As Chinese military activity around Taiwan continues to ramp up, a senior administration official tells me, “We are watching very closely and would be ready for anything including a grave miscalculation by the PRC. We’re definitely watching them.”

    ZeroHedge: China Pushing Things To “Boiling Point”
    For anyone who reads this site who has forgotten, the Taiwan war threat has not disappeared. As reported to me by a Chinese national with connections to the PRC, China is preparing to attack Taiwan if Donald Trump becomes the President of the United States. Deadline is January 2021.

    It should be no surprise that talk of war is ramping up again as demands for US Presidential election vote recounts rise and the very real possibility of a Trump second term emerges on legal and historical precedent grounds and that becomes apparent to all. A second term for Trump cannot be ruled out anymore.

    War was always the ultimate threat as a reaction to his Presidency. It is very real and the news streams on this subject should be making that obvious to all of us by now. We (the West) are going to war if Trump succeeds with his legal arguments to overturn the election results. Readers at VREAA, as tiny a group as we are, should be prepared for the lights going out if that happens.

    Hope you all stocked up on Beans and Rice!

  14. So is VREAA finally saying ‘uncle’?

    • A very fair question.
      My ‘Prediction 2010-2019’ (see sidebar) was certainly proven incorrect.
      I was very, very wrong about interest rates. Who would have predicted free money for this long?… Mispricing of risk; encouraging speculation… everything bubble (for now).
      Bitcoin, NFTs, SPACs… Stocks at historic extremes with apparent complete dislocation of prices from underlying value.
      Fundamentals currently mean absolutely nothing …
      So arguably not surprising that housing would also float in this madness.

      But actually saying ‘uncle’? Well, not sure about that. I haven’t purchased real estate, if that is what capitulation would mean. They always say the bull is over when the last bear capitulates. But it’s fair to say that I’ve been gobsmacked by Vancouver RE’s resilience… it seems to get stronger with every disaster thrown at it… 2008? – rocket boost… COVID? – another stage of rocket boost. All we need now is an earthquake to send it into the absolute stratosphere.

      • RE Refugee

        Yeah, well that makes two of us. I take no pleasure in seeing anyone capitulate, I dont own any real estate either. I can say that I did tell you all about bitcoin around 6 years ago but everyone thought I was nuts. Its all a crap shoot. Buying RE 10 years ago would have been nearly just as profitable for me.

  15. Pingback: “Always the Right Time to Buy!” – Cheap Rope For Vancouver RE Buyers - Finance Library

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